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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Tuesday, March 24, 2015

February 2015 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 0.2% in February (+0.2% expected). The increase in the all items index was broad-based, with contributions from shelter, energy, and food indexes. The energy index rose after a long series of declines, increasing 1.0% as the gasoline index turned up after falling in recent months; electricity rose to another all-time seasonally adjusted high. The food index, unchanged last month, also rose in February, though major grocery store food group indexes were mixed.
The index for all items less food and energy rose 0.2% in February, the same increase as in January. In addition to shelter, the indexes for used cars and trucks, apparel, new vehicles, tobacco, and airline fares were among those that increased. The medical care index was unchanged, while the personal care index declined.
The all items index was unchanged over the past 12 months, after showing a 0.1% decline for the 12 months ending January. Over the last 12 months the food index rose 3.0% (meats: +10.7%; beef: +15.2% year-over-year) and the index for all items less food and energy increased 1.7%. These increases were offset by an 18.8% decline in the energy index (although electricity was +3.2% higher YoY).  
The seasonally adjusted Producer Price Index for final demand (PPI) fell 0.5% in February (+0.3% expected). Final demand prices moved down 0.8% in January and 0.2% in December. On an unadjusted basis, the index for final demand decreased 0.6% for the 12 months ended in February. In February, about 70% of the decline in final demand prices can be attributed to a 0.5% decrease in the index for final demand services. Prices for final demand goods moved down 0.4%, thanks primarily to fresh and dry vegetables. 
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The price indexes we track were mixed on both month-over-month and year-over-year bases in January. The Wood Fiber index ticked marginally lower. 
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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.

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