Cheap fuel pulls down PPI in January – USA TODAY

Nissan trim and chassis teams works on 2015 Nissan Murano at the Nissan plant in Canton, Miss. The Labor Department announced the Producer Price Index for January, measuring costs before they’re passed to consumers.(Photo: Rogelio V. Solis, AP)

The Labor Department says the producer price index — one measure of inflation — decreased a seasonally adjusted 0.8% in January, pulled down by a 24% drop in gasoline prices.

In January, the index for final-demand goods dropped 2.1%, the seventh consecutive decrease. Leading the broad-based decline in January, prices for final demand energy fell 10.3%.

Labor’s PPI program measures the average change, over time, in selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services.

The decline in prices for final demand goods was led by the index for gasoline. Prices for diesel fuel, jet fuel, basic organic chemicals, dairy products,

and home heating oil also moved lower, Labor said.

Details:

•A 19.2% decline in diesel fuel prices was a major factor in the
decrease in the index for processed goods for intermediate demand.

•Prices for basic organic chemicals, gasoline, jet fuel, plastic resins and materials, and dairy products also moved lower.

•Electric power index increased 1.3%.

•Prices for basic inorganic chemicals and
formula feeds also advanced.

•Indexes for final-demand foods and for final-demand goods, excluding food.

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