September 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 0.1 percent in September. Increases in shelter and food indexes outweighed declines in energy indexes to result in the seasonally adjusted all items increase. The food index rose 0.3 percent as five of the six major grocery store food group indexes increased. The energy index declined 0.7 percent as the indexes for gasoline, electricity, and fuel oil all fell. 

The all items index increased 1.7 percent over the last 12 months, the same increase as for the 12 months ending August. The 12-month change in the index for all items less food and energy also remained at 1.7 percent. The 12-month change in the shelter index has been gradually increasing, and reached 3.0 percent for the first time since January 2008. The food index has also risen 3.0 percent over the span, while the energy index has declined 0.6 percent.

The seasonally adjusted Producer Price Index for final demand (PPI) decreased 0.1 percent in September. Final demand prices were unchanged in August and advanced 0.1 percent in July. On an unadjusted basis, the index for final demand increased 1.6 percent for the 12 months ended in September.

In September, the 0.1 percent decrease in final demand prices can be traced to the indexes for both goods and services, which moved down 0.2 percent and 0.1 percent, respectively. The decline in goods was led by prices for final demand energy, which fell 0.7 percent (especially gasoline, which dropped 2.6 percent). The index for final demand foods also decreased 0.7 percent. In contrast, prices for final demand goods less foods and energy advanced 0.2 percent.  

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The price indices we track were either unchanged or rose in September (relative to August). Compared to a year earlier, all indices were higher. The indices for both Wood Fiber and Lumber & Wood Products set new highs. 

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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.