Key points:

• PPI down 0 in December.1%, continuing the downward trend。
• Diesel prices plunge, but gasoline and service prices rise。
• The rise in core PPI contrasts with the decline in overall PPI。

December PPI Overview

In December, the producer price index (PPI) for US final demand fell by 0.1%, marking a continuation of the downward trend observed since October。In contrast, the index's unadjusted rise in 2023 was 1.0%, while rising 6% in 2022.4%。

Decomposition of final demand

The decline in December was mainly due to 0% of final demand for goods..4% decline, with a particularly significant 1% decline in final demand energy prices..2% decline。However, final demand services remain unchanged。Notably, the final demand index, excluding food, energy and trade services, rose by 0% in December..2%, on the basis of a slight increase in the previous two months。

Detailed Product Analysis

The decline in final demand for goods in December was mainly driven by a 12-month plunge in diesel prices..4% impact。This was partly driven by a 2.1% offset。In the final demand services sector, while overall prices remained stable, prices in industries such as securities brokerage and investment advisory rose by 3.3%。

Comparison with Core PPI

Despite the overall decline in PPI, core PPI (excluding volatile food, energy and trade services) showed an upward trend, rising by 0% in December..2%。This data suggests that prices are largely stable outside the more volatile sectors, rising 2% year-on-year in 2023..5%, compared with a year-on-year increase of 4% in 2022..7%。

short-term forecast

The current PPI data, with its declining final demand commodity prices and stable core PPI data, suggest a pessimistic outlook in the short term.。The sharp fall in the prices of major commodities (such as diesel fuel), coupled with the holding of final demand services, points to a possible slowdown in underlying inflationary pressures.。However, the gradual rise in core PPI indicates the fundamental stability of prices。Traders should pay close attention to upcoming economic indicators for more detailed market movements。