August 2010 Consumer and Producer Price Indices: No Deflation Yet

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The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in August on a seasonally adjusted basis. Before seasonal adjustment, the all-items index increased 0.1 percent for the month. Over the last 12 months, the all-items index increased 1.1 percent before seasonal adjustment. The cost of energy rose in August and, as in July, was the primary factor in the seasonally adjusted all-items increase. All major energy components posted increases, with the gasoline index being the main factor. The food index, which declined in July, rose in August.

The seasonally adjusted Producer Price Index for Finished Goods (PPI) increased 0.4 percent in August; intermediate goods moved up 0.3 percent in August, and the crude goods index climbed 2.3 percent.

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Details at different stages of processing include:

Finished goods -- The August advance in the finished goods index can be traced primarily to prices for finished energy goods, which rose 2.2 percent.

Intermediate goods -- The Producer Price Index for Intermediate Materials, Supplies, and Components increased 0.3 percent in August. Accounting for about 85 percent of this broad-based advance, prices for intermediate energy goods rose 1.3 percent.

Crude goods -- The Producer Price Index for Crude Materials for Further Processing moved up 2.3 percent in August; more than half of the monthly increase can be attributed to the index for crude foodstuffs and feedstuffs, which moved up 3.5 percent.

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With the exception of Pulp, Paper & Allied Products, the main indices related to forest products manufacturing have retreated from their highs earlier this year--on both monthly and annual percentage change bases.

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