June 2014 Consumer and Producer Price Indices (incl. Forest Products)

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The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in June. In contrast to May’s broad-based increase, the June seasonally adjusted increase in the all items index was primarily concentrated in the gasoline index. It rose 3.3 percent and accounted for two-thirds of the all items increase. Other energy indexes were mixed, with the electricity index rising, but the indexes for natural gas and fuel oil declining. The food index decelerated in June, rising only slightly, with the food at home index flat after recent increases.

The index for all items less food and energy also decelerated in June, increasing 0.1 percent after a 0.3 percent increase in May. The indexes for shelter, apparel, medical care, and tobacco all increased in June, and the index for household furnishings and operations rose for the first time in a year. However, the index for new vehicles declined after recent increases, and the index for used cars and trucks also fell.

The all items index increased 2.1 percent over the last 12 months, the same figure as for the 12 months ending May. The index for all items less food and energy rose 1.9 percent over the last 12 months, a slight decline from the 2.0 percent figure last month. The index for energy increased 3.2 percent over the span, and the food index rose 2.3 percent.

The seasonally adjusted Producer Price Index for final demand rose 0.4 percent in June. This increase followed a 0.2 percent decline in May and a 0.6 percent advance in April. On an unadjusted basis, the index for final demand moved up 1.9 percent for the 12 months ended in June.

In June, the 0.4 percent increase in final demand prices can be traced to a 0.5 percent advance in the index for final demand goods and a 0.3 percent rise in prices for final demand services.

Within intermediate demand, prices for processed goods advanced 0.4 percent, the index for unprocessed goods fell 0.9 percent, and prices for services moved up 0.6 percent. 

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The price indices we track were mixed relative to May. Compared to a year earlier, all indices were higher. The indices for Intermediate Materials; Pulp, Paper & Allied Products; and Lumber & Wood Products set new highs in June. 

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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.