May 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 0.4% in May (+0.5% expected). The gasoline index increased sharply in May, rising 10.4% and accounting for most of the seasonally adjusted all-items increase. Other energy indexes were mixed, with the fuel oil index rising but the electricity index declining and the index for natural gas unchanged. The food index was unchanged for the second month in a row, as a decline in the food at home index offset an increase in the index for food away from home.

The index for all items less food and energy rose 0.1% in May, its smallest increase since December. The increases for shelter (+0.2%), airline fares (+0.7%), and medical care (goods: +0.4%; services: +0.2%) were partially offset by declines in apparel, household furnishings and operations, and for used cars and trucks.  

The all-items index was unchanged for the 12 months ending May. The energy index fell 16.3% over the last 12 months, with the gasoline index down 25.0% despite rising in May. The food index increased 1.6% over the last year, and the index for all items less food and energy rose 1.7%.

The seasonally adjusted Producer Price Index for final demand (PPI) rose 0.5% in May (+0.4% expected), all of which can be traced to a 1.3% increase in prices for final demand goods (especially a 17% jump in the gasoline index). The index for final demand services was unchanged. The final demand index declined 1.1% for the 12 months ended in May, the fourth straight 12-month decrease. 

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The price indexes we track were mixed on both month-over-month and year-over-year bases in May. Only Wood Fiber decreased year-over-year. 

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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.