Wholesale pricing weak

The seasonally-adjusted Producer Price Index for Finished Goods fell 1.9 percent in December. This decrease followed a 2.2-percent decline in November and a 2.8-percent drop in October. At the earlier stages of processing, prices received by producers of intermediate goods fell 4.2 percent in December after decreasing 4.3 percent in the prior month, and the crude goods index declined 5.3 percent following a 12.5-percent drop in November.

Just about all the current (last month, last three months) data in the report's summary tables were outside the parameters I use to determine a bad news price report. While consumers may get a bit of relief as the significant price weakness portrayed in this release gets passed through, such weak pricing is symptomatic of very weak demand. Thus, even though I gassed up recently, this is very much a bad news report.

The January GNI is now at 9.1 percent, with over half of the reports due out in the month already made public. BLS will release its next look at wholesale prices on February 17.