Producer Price Index MoM

The Producer Price Index MoM measures month-over-month percent change in selling prices received by domestic producers for goods, services, and construction sold for final demand. Final demand means output for personal consumption, capital investment, government use, or export. The series uses seasonally adjusted data, meaning regular seasonal patterns are removed for monthly comparison. It excludes imports, taxes, and owners' equivalent rent (an imputed homeowner cost); gains mean higher producer prices and drops mean lower prices.

It began in 1902 as the Wholesale Price Index until 1978 and uses final-demand aggregation since January 2014 data. Coverage is nearly all mining and manufacturing, about 69% of services, and 17% of construction.

The Bureau of Labor Statistics publishes the index monthly, usually in the 2nd or 3rd week after the reference month. Responses cover prices effective on the Tuesday of the week containing the 13th (the 9th to the 15th), reported through the online collection facility. Each release is embargoed until 8:30 a.m. Eastern Time and is published with a detailed report, databases, and tables. All indexes remain revisable for 4 months for late reports, while seasonally adjusted series are recalculated for 5 years each January.

Final demand combines goods, services, and construction, with December 2024 weights shown below.

• Goods, 29.686%: unprocessed and processed goods for consumption, investment, government, and export, including food and energy.
• Trade services, 19.365%: changes in retail and wholesale margins, meaning markup over acquisition cost, not selling prices, such as food retailing margins.
• Transportation and warehousing services, 4.909%: passenger and cargo transport plus storage for final demand, including airline passenger services.
• Services less trade, transportation, and warehousing, 43.434%: other services such as publishing, banking, lodging, and hospital inpatient care.
• Construction, 2.606%: new and maintenance construction for private investment and government, such as office buildings.
• Core, 94.776%: final demand less foods, energy, and trade services for underlying inflation.

Final demand for June 2022, released July 14, 2022, rose 1.1% monthly seasonally adjusted and 11.3% yearly; core inflation rose 0.3% monthly and 6.4% yearly. Goods drove 75% of the rise, gaining 2.4% as energy jumped 10.0% with nearly 90% of the goods gain on gasoline up 18.5%. Services rose only 0.4% as trade margins gained 0.8%, about 67% of the services rise. The gap showed an energy shock, not broad inflation, and it reversed when final demand fell 0.5% in July 2022.

1. Transaction prices: Actual transaction prices at shipment, net of discounts and rebates; tariffs and excise taxes are excluded as non-revenue, but tariff repricing is included. Trade industries use gross margins, missing prices are imputed (estimated from peers in the same cell), and specification changes are quality-adjusted (corrected for product changes).
2. Modified Laspeyres formula: The index uses a modified Laspeyres formula (base-period quantities fixed, prices varying) that averages price relatives (item price ratios) by value weight. For example, an index rise from 145.800 to 147.300 equals 1.0% monthly.
3. Weights: Item weights come from establishment shipment values, while index weights come from economic censuses updated about every 5 years. The weights use 2017 shipment values since January 2023. Industry indexes use net output weights, meaning sales outside the industry, while commodity and final-demand indexes use gross shipment weights.
4. Seasonal adjustment and precision: Monthly change uses seasonally adjusted data from X-13 ARIMA software, which removes regular seasonal patterns; industry net-output indexes are not adjusted. Index levels are published to 3 decimals since July 2021 data, with percent change to 1 decimal. Percent change equals (new index minus old index) divided by old index times 100.