October 2010 Consumer and Producer Price Indices

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The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in October. Over the last 12 months, the all items index increased 1.2 percent. As has frequently been the case in recent months, an increase in the energy index was the major factor in the all items seasonally adjusted increase. The gasoline index rose for the fourth month in a row and accounted for almost 90 percent of the all items increase; the household energy index rose as well.

The food index rose slightly, while the index for all items less food and energy was unchanged -- the third month in a row with no change. The indexes for shelter and medical care rose, but these increases were offset by declines in an array of indexes including new vehicles, used cars and trucks, apparel, recreation, and tobacco.

The seasonally adjusted Producer Price Index for Finished Goods (PPI) increased 0.4 percent in October. This advance followed a 0.4 percent rise in both September and August. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 1.2 percent in October, and the crude goods index increased 4.3 percent. On an unadjusted basis, prices for finished goods advanced 4.3 percent for the 12 months ended October 2010, their largest year-over-year gain since a 5.1 percent rise in May 2010.
 

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Details at different stages of processing include:

Finished goods -- The increase in the index for finished goods can be traced to prices for finished energy goods, which moved up 3.7 percent. By contrast, the indexes for both finished goods less foods and energy and for finished consumer foods decreased, falling 0.6 percent and 0.1 percent, respectively.

Intermediate goods -- This index increased 1.2 percent in October, its third straight monthly advance. The October rise in the intermediate goods index was broad based, with energy prices climbing 3.2 percent; the index for intermediate materials less foods and energy increased 0.6 percent, and prices for foods and feeds moved up 1.3 percent. On a 12-month basis, the index for intermediate goods climbed 6.4 percent in October, its eleventh consecutive year-over-year increase.

Crude goods -- The crude-goods index rose 4.3 percent in October. For the three months that ended in October, crude goods prices increased 6.2 percent. In October, nearly half of the monthly advance is attributable to the index for crude energy materials, which climbed 5.4 percent. Also contributing to the broad-based rise in crude goods prices, the indexes for crude foodstuffs and feedstuffs and for crude nonfood materials less energy moved up 4.2 percent and 2.1 percent, respectively.
 

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In the case of forest products sector PPIs that we track, most indices appear to be either in the process of breaking off their earlier declines, or are beginning/continuing to move higher. Prices are all higher than year-earlier levels, although the rate of growth has slowed in several cases.
 

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