The index for final demand services was up 0.5% in October, which was the largest increase since July 2013. The October increase is due to a 1.5% increase in margins for final demand trade services.
Dropping oil prices should play a big role in most of the PPI readings. In October, a 26.1% jump in margins for fuels and lubricants retailing accounted for nearly 40% of the increase in the index for final demand services.
The indexes for machinery, equipment, parts and supplies wholesaling; food and alcohol retailing; food and alcohol wholesaling; inpatient care; and traveler accommodation services also moved higher.
The index for final demand goods moved down 0.4% in October, marking the fourth consecutive decrease. The October decline was driven by prices for final demand energy, which fell 3.0%. The index for final demand goods, excluding foods and energy, edged down 0.1%. At the same time, prices for final demand foods moved up 1.0%.
Over 80% of the October decline in prices for final demand goods can be attributed to the index for gasoline, which fell 5.8%. Prices moved lower for products such as liquefied petroleum gas, prepared animal feeds, home heating oil, diesel fuel and ethanol. In contrast, the index for meats increased 5.3%. Prices for electric power, pharmaceutical preparations and passenger cars also increased.
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