For the third time in four months, wholesale inflation fell compared with levels a year earlier.
The Bureau of Labor Statistics (BLS) said the producer price index (PPI), a measure of the prices that companies get for finished goods in the marketplace, fell 0.3% in May after a 0.2% rise in April. However, three of the four supply-chain stages registered declining inflation year-over-year.
Final demand goods prices fell 1.6% in May, the largest decrease since July 2022.
All through the supply chain, wholesale prices fell from levels a year earlier, signifying price relief from raw materials up to finished goods. The earliest supply-chain stages each posted the largest year-over-year declines since the middle of 2020, and their impact has dramatically slowed rising prices for final demand products.
Goods inputs for Stage 4 intermediate demand, measuring the products purchased by industries primarily producing output sold to final demand, such as RV manufacturers, fell 0.6% in May after falling 0.2% in April. Year-over-year Stage 4 demand rose 1.5%, down from a 2.9% increase in April.
Goods inputs for Stage 3 intermediate demand, measuring suppliers to Stage 4 producers such as RV manufacturers, fell 2.4% in May after a 1.2% decline in April. Goods inputs for Stage 3 demand have declined year-over-year for 11 consecutive months.
Overall, year-over-year Stage 3 demand fell 6.5%. The decline was the largest year-over-year decline since May 2020.
Goods inputs for Stage 2 intermediate demand, measuring suppliers to Stage 3 suppliers, fell 4.0% in May after a 1.9% increase in April, the fourth time in five months Stage 2 goods inputs fell year-over-year. Overall, Stage 2 intermediate demand dropped 9.8% year-over-year, the largest year-over-year decline since April 2020.
Finally, goods inputs for Stage 1 demand fell 1.8% in May after a 0.7% drop in April, the fourth consecutive month of year-over-year declines. Overall, demand declined 3.6% year-over-year, the largest 12-month decline since July 2020.
