Highlights

The Producer Price Index for final demand (PPI) was unchanged month-over-month in November (Briefing.com consensus 0.2%) while core PPI, which excludes food and energy, surprisingly declined 0.2% (Briefing.com consensus 0.2%). That left the year-over-year increases at 1.1% and 1.3%, respectively, versus 1.1% and 1.6% in October.

Key Factors

The index for final demand saw a 0.3% jump in prices for final demand goods offset by a 0.3% decrease in prices for final demand services.
The index for final demand less foods, energy, and trade services was up just 1.3% yr/yr, which was the smallest 12-month change since September 2016.
Prices for processed goods for intermediate demand rose 0.2% in November, but were down 2.9% yr/yr.
Prices for unprocessed goods for intermediate demand increased 3.9% in November, but were still down 5.5% yr/yr.

The key takeaway from this report is that it speaks to why the Fed is choosing to remain patient in raising the fed funds rate, as it reflects the disinflation (and low inflation expectations) trend Fed Chair Powell does not want to see growing deeper roots.

Category	NOV	OCT	SEP	AUG	JUL
Final Demand	0.0%	0.4%	-0.3%	0.1%	0.2%
Core (excluding ...)
Food and Energy	-0.2%	0.3%	-0.3%	0.3%	-0.1%
Food, Energy, and Trade	0.0%	0.1%	0.0%	0.4%	-0.1%
Final Demand Goods
Total	0.3%	0.7%	-0.4%	-0.5%	0.4%
Energy	0.6%	2.8%	-2.5%	-2.5%	2.3%
Finished Goods	0.5%	0.8%	-0.5%	-0.6%	0.6%
Final Demand Services
Total	-0.3%	0.3%	-0.2%	0.3%	-0.1%
Trade	-0.6%	0.8%	-1.0%	0.2%	0.2%
Intermediate Demand
Processed	0.2%	0.4%	-0.4%	-0.7%	0.2%
Unprocessed	3.9%	1.0%	-1.4%	-1.0%	1.6%
Services	-0.1%	-0.2%	0.1%	0.5%	-0.2%