Following the deflationary core import price index print, producer prices dropped 0.1% in December, missing expectations dramatically and 'deflating' the most since Aug 2016.
Under the headlines:
The index for final demand services moved down 0.2 percent in December following nine consecutive increases.
Most of the decrease can be traced to a 0.6-percent decline in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services fell 0.4 percent.
Conversely, the index for final demand services less trade, transportation, and warehousing inched up 0.1 percent.
Product detail: A major factor in the December decline in prices for final demand services was the index for automotive fuels and lubricants retailing, which fell 10.7 percent.
The indexes for loan services (partial); airline passenger services; apparel, footwear, and accessories retailing; legal services; and health, beauty, and optical goods retailing also moved lower.
In contrast, prices for inpatient care advanced 0.7 percent. The indexes for truck transportation of freight and apparel wholesaling also increased.
In December prices for beef and veal fell 6.3 percent. The indexes for gasoline, fresh and dry vegetables, liquefied petroleum gas, and turbines and turbine generator sets also moved lower.