Core Producer Prices Tumbled Most Since COVID Lockdowns In February

March 13, 2025

Following yesterday’s slower than expected rise in consumer prices, this morning we see producer prices following a similar path with Core PPI dropping by the most MoM since April 2020 (-0.1% MoM vs +0.3% exp), slowing the annual pace of change for producer prices to +3.4%…

Source: Bloomberg

The headline PPI was unchanged MoM (considerably slower than the +0.3% expected)…

Source: Bloomberg

PPI summary: 0.3% increase in prices for final demand goods offset a 0.2% decline in the index for final demand services. The index for final demand less foods, energy, and trade services moved up 0.2% in February after rising 0.3% in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services advanced 3.3 percent.

PPI Final demand: The index for final demand goods increased 0.3% in February, fifth consecutive rise. Leading the February advance, prices for final demand foods jumped 1.7%. The index for final demand goods less foods and energy moved up 0.4 percent. In contrast, prices for final demand energy fell 1.2%.

Product detail:

Two-thirds of the February increase in the index for final demand goods is attributable to prices for chicken eggs, which jumped 53.6 percent.
The indexes for pork, fresh and dry vegetables, electric power, tobacco products, and carbon steel scrap also moved higher.
Conversely, prices for gasoline declined 4.7 percent.
The indexes for processed young chickens and for primary basic organic chemicals also decreased.

PPI Final demand services: The index for final demand services fell 0.2% in February, the largest decline since moving down 0.2 percent in July 2024. The February decrease can be traced to margins for final demand trade services, which dropped 1.0 percent. In contrast, prices for final demand services less trade, transportation, and warehousing rose 0.2 percent, while the index for final demand transportation and warehousing services was unchanged.

Product detail:

Over 40% of the February decline in prices for final demand services is attributable to margins for machinery and vehicle wholesaling, which decreased 1.4 percent.
The indexes for food and alcohol retailing; automobiles and automobile parts retailing; apparel, footwear, and accessories retailing; chemicals and allied products wholesaling; and residential real estate loans (partial) also moved lower.
Conversely, prices for inpatient care advanced 0.8 percent.
The indexes for hospital outpatient care and for machinery and equipment parts and supplies wholesaling also increased

Under the hood, Energy and Trade Services declined the most MoM…

Source: Bloomberg

Margin pressure remains on American corporations, although that pressure did ease a little last month…

Source: Bloomberg

Finally we highlight that, two-thirds of the February increase in the index for final demand goods is attributable to prices for chicken eggs, which jumped 53.6 percent.

And now egg prices are tumbling…