| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| PPI-FD - M/M | 0.3% | 0.2% to 0.3% | 0.2% | 0.3% |
| PPI-FD - Y/Y | 2.7% | 2.6% to 2.8% | 3.0% | 2.7% |
| Ex-Food & Energy - M/M | 0.2% | 0.1% to 0.3% | 0.2% | 0.1% |
| Ex-Food & Energy - Y/Y | 3.0% | 2.6% | ||
| Ex-Food, Energy & Trade Services - M/M | 0.2% | 0.1% | ||
| Ex-Food, Energy & Trade Services - Y/Y | 3.5% | 2.9% | ||
| PPI-FD Goods - M/M change | 0.9% | |||
| PPI-FD Goods - Y/Y change | 3.3% | |||
| PPI-FD Services - M/M change | 0.0% | |||
| PPI-FD Services - Y/Y change | 2.5% |
Highlights
The November final demand producer price index (PPI) is up 0.2 percent from October after rising 0.1 percent in October from September. The November increase is slightly below the consensus of up 0.3 percent in the Econoday survey. The PPI excluding food and energy is also up 0.2 percent in November after an increase of 0.4 percent in October. The BLS core excluding food, energy, and trade services is up 0.2 percent in November after rising 0.7 percent in October. This suggests that the most inclusive measures of price changes at the producer level are seeing small upward price pressures.
However, price changes are uneven in major categories. The PPI for foods is unchanged in November from October but hints at it is a reversal of the 0.4 percent decline in October from September. Energy prices jump 4.6 percent higher in November from the prior month after a decline of 3.2 percent in October from September. The PPI for trade services is down 0.8 percent month-over-month in both November and October.
The year-over-year PPI is up 3.0 percent in November, picking up the pace from up 2.8 percent in October. The PPI excluding food and energy is up 3.3 percent compared to a year ago, the same as in October. The core PPI is up 3.5 percent from November 2024 compared to up 3.4 percent from October 2024. Too much should not be made of a change in the reading of a tenth or even two-tenths from one report to the next. Nonetheless, a flattening in the trend for price increases at the producer level suggests that there are still tariff-related costs moving through the economy.
However, price changes are uneven in major categories. The PPI for foods is unchanged in November from October but hints at it is a reversal of the 0.4 percent decline in October from September. Energy prices jump 4.6 percent higher in November from the prior month after a decline of 3.2 percent in October from September. The PPI for trade services is down 0.8 percent month-over-month in both November and October.
The year-over-year PPI is up 3.0 percent in November, picking up the pace from up 2.8 percent in October. The PPI excluding food and energy is up 3.3 percent compared to a year ago, the same as in October. The core PPI is up 3.5 percent from November 2024 compared to up 3.4 percent from October 2024. Too much should not be made of a change in the reading of a tenth or even two-tenths from one report to the next. Nonetheless, a flattening in the trend for price increases at the producer level suggests that there are still tariff-related costs moving through the economy.
Market Consensus Before Announcement
PPI-FD expected up the same 0.3 percent on month and 2.7 percent on year in November after 0.3 percent and 2.7 percent in October.
* BLS will not produce an October 2025 Producer Price Index (PPI) news release. BLS is collecting October reference period data on a delay due to the lapse in appropriations. BLS plans to publish October data with the November 2025 PPI news release on January 14, 2026.
* BLS will not produce an October 2025 Producer Price Index (PPI) news release. BLS is collecting October reference period data on a delay due to the lapse in appropriations. BLS plans to publish October data with the November 2025 PPI news release on January 14, 2026.
Definition
The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measures the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. Effective with the January 2014 PPI data release in February 2014, BLS transitioned from the Stage of Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation system. The headline PPI (for Final Demand) measures price changes for goods, services, and construction sold to final demand: personal consumption, capital investment, government purchases, and exports.
Description
The PPI measures prices at the producer level before they are passed along to final consumers. A portion of the inflation at the producer level gets passed through to the consumer price index (CPI). By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months.
While the CPI is the price index with the most impact in setting interest rates, the PPI provides significant information earlier in the production process. As a starting point, interest rates have an"inflation premium" and components for risk factors. A lender will want the money paid back from a loan to at least have the same purchasing power as when loaned. The interest rate at a minimum equals the inflation rate to maintain purchasing power and this generally is based on the CPI. Changes in inflation lead to changes in interest rates and, in turn, in equity prices.
The PPI comes in two key main versions: final demand (FD) and intermediate demand (ID). The final demand portion is composed of six main price indexes: final demand goods; final demand trade services; final demand transportation and warehousing services; final demand services less trade, transportation, and warehousing; final demand construction; and overall final demand.
The intermediate demand portion of the FD-ID system tracks price changes for goods, services, and construction products sold to businesses as inputs to production, excluding capital investment. There are two parallel treatments of intermediate demand, each constructed from the identical set of commodity price indexes. The first treatment organizes commodities according to commodity type, and the second organizes commodities using a stage-based, production flow model.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to producers increase, businesses are faced with either charging higher prices or taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
Under the prior PPI system, the producer price index was substantially more volatile than the consumer price index because the CPI included services while the PPI did not. Volatility has been reduced substantially in the PPI-FD due to the inclusion of services but the PPI still is more volatile than the CPI. Wages are a bigger share of the costs at the retail level than at the producer level and this plays a role in the CPI’s lower volatility. Also, the PPI does not include owners’ equivalent rent—a large and slow moving component in the CPI. Food and energy prices are major sources of volatility in the PPI, hence, the greater focus on the"core PPI" which excludes these two components.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
While the CPI is the price index with the most impact in setting interest rates, the PPI provides significant information earlier in the production process. As a starting point, interest rates have an"inflation premium" and components for risk factors. A lender will want the money paid back from a loan to at least have the same purchasing power as when loaned. The interest rate at a minimum equals the inflation rate to maintain purchasing power and this generally is based on the CPI. Changes in inflation lead to changes in interest rates and, in turn, in equity prices.
The PPI comes in two key main versions: final demand (FD) and intermediate demand (ID). The final demand portion is composed of six main price indexes: final demand goods; final demand trade services; final demand transportation and warehousing services; final demand services less trade, transportation, and warehousing; final demand construction; and overall final demand.
The intermediate demand portion of the FD-ID system tracks price changes for goods, services, and construction products sold to businesses as inputs to production, excluding capital investment. There are two parallel treatments of intermediate demand, each constructed from the identical set of commodity price indexes. The first treatment organizes commodities according to commodity type, and the second organizes commodities using a stage-based, production flow model.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to producers increase, businesses are faced with either charging higher prices or taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
Under the prior PPI system, the producer price index was substantially more volatile than the consumer price index because the CPI included services while the PPI did not. Volatility has been reduced substantially in the PPI-FD due to the inclusion of services but the PPI still is more volatile than the CPI. Wages are a bigger share of the costs at the retail level than at the producer level and this plays a role in the CPI’s lower volatility. Also, the PPI does not include owners’ equivalent rent—a large and slow moving component in the CPI. Food and energy prices are major sources of volatility in the PPI, hence, the greater focus on the"core PPI" which excludes these two components.
The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
