The headline Final Demand Producer Price Index using new methodology eased 0.1% during December following a 0.4% November increase. It was the first monthly decline since August 2016. The y/y rise nevertheless remained firm at 2.6%, the strongest gain since 2011. A 0.2% December rise had been expected in the Action Economics Forecast Survey. The PPI excluding food & energy also slipped 0.1%. A 0.2% rise was expected. The y/y rise of 2.3% moved above the gains of 1.7% in 2016 and 0.2% in 2015.

Using the old methodology for the Producer Price Index, prices fell 0.3% (+3.3% y/y) following a 0.8% gain. Excluding food & energy, the index held steady (2.0% y/y) after two months of 0.3% increase.

An updated measure of core producer price inflation is the overall index excluding food, energy and trade services. It gained 0.1% last month (2.3% y/y) after three months of stronger increase.

Final demand goods prices held steady (3.5% y/y) following a 1.0% jump. The price index excluding food & energy increased 0.2% after two months of 0.3% rise. The 2.3% Dec/Dec gain rose above the 1.7% increase in 2016 and the 0.1% slip during 2015.

Food prices declined 0.7% (+2.1% y/y) following a 0.3% rise. Beef & veal prices weakened 6.3% (+3.3% y/y) after a 3.4% rise. Egg prices were off 4.1% (+48.8% y/y) after a 3.2% decline. Dairy product prices improved 0.2% (-0.7% y/y) and reversed the prior month's increase, while fresh fruit & melon costs declined 0.5% (+6.5% y/y). Energy prices held steady (10.1% y/y) after a 4.6% jump. Gasoline prices declined 3.9% (+16.7% y/y) after a 15.8% jump. Home heating oil prices jumped 13.3% (27.9% y/y) following a 0.9% rise. Natural gas prices improved 0.8% (5.8% y/y) after a 0.2% rise. Electric power costs ticked 0.1% higher (2.6% y/y) following a 0.4% increase.

Nondurable consumer goods prices less food & energy held steady (3.8% y/y) following a 0.3% rise. Durable consumer goods prices also were unchanged (1.2% y/y) after a 0.5% rise. Household furniture costs rose 0.3% (2.9% y/y) after a 1.1% jump. Passenger car prices rose 0.2% (-0.5% y/y) after a 0.5% rise. Light truck prices held steady (1.0% y/y) following a 1.1% surge. Capital equipment prices held steady (1.0% y/y) following a 0.4% jump.

Final demand for services prices eased 0.2% (+2.2% y/y). Prices less trade, transportation & warehousing gained 0.1% (2.3% y/y) following a 0.4% increase. Trade services prices declined 0.6% (+2.1% y/y) after easing 0.3%. Private passenger transportation prices declined 4.3% (-3.7% y/y) following three months of strong increase.

Final demand construction prices slipped 0.1% (+3.0% y/y) as prices for private capital investment eased 0.1% (+3.0% y/y). Prices for public investment ticked 0.1% higher (3.0% y/y).

Prices for intermediate demand for goods strengthened 0.5% (5.1% y/y) for a second consecutive month.

The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. The expectations figures are available in the AS1REPNA database.