What is Macro Pulse?

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
Macro Pulse's timely yet in-depth coverage.

Friday, November 20, 2015

October 2015 Consumer and Producer Price Indices (incl. Forest Products)

Click image for larger version
The seasonally adjusted consumer price index for all urban consumers (CPI-U) increased 0.2% in October -- in line with expectations. The indexes for food, energy, and all items less food and energy all increased modestly in October. The food index, which increased 0.4% in September, rose 0.1% in October, with four of the six major grocery store food group indexes rising. The energy index, which declined in August and September, advanced 0.3% in October; major energy component indexes were mixed.
The index for all items less food and energy rose 0.2% in October, the same increase as in September. Advances in the indexes for shelter (rent: +0.3%; owners’ equivalent rent: +0.2%) and medical care (+0.8%) were the largest contributors to the increase. In contrast, the indexes for apparel, new vehicles, household furnishings and operations, and used cars and trucks all declined.
The all-items index rose 0.2% over the last 12 months. The 12-month change has been between negative 0.2% and positive 0.2% since January. The food index has increased 1.6% over the past year, and the index for all items less food and energy has risen 1.9%. The rise in housing costs has also been significant (rent: +3.7%; owners’ equivalent rent: +3.1%). These advances have been mostly offset by a 17.1% decline in the energy index.

The seasonally adjusted producer price index for final demand (PPI) decreased 0.4% (-0.2% expected) in October. Final demand prices moved down 0.5% in September and were unchanged in August. Roughly 70% of the October decrease in the final demand index can be traced to prices for final demand services, which moved down 0.3%. The index for final demand goods declined 0.4%.
Final demand services: The index for final demand services moved down 0.3% in October following a 0.4-percent decline in the prior month. Over 70% of the decrease in October can be traced to margins for final demand trade services, which dropped 0.7%. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand services less trade, transportation, and warehousing edged down 0.1%. In contrast, prices for final demand transportation and warehousing services inched up 0.1%.
Product detail: Over half of the October decline in the index for final demand services is attributable to margins for fuels and lubricants retailing, which fell 15.8%. The indexes for apparel, jewelry, footwear, and accessories retailing; loan services (partial); portfolio management; wireless telecommunication services; and health, beauty, and optical goods retailing also declined. Conversely, prices for truck transportation of freight advanced 0.3%. The indexes for food retailing and deposit services (partial) also increased.
Final demand goods: The index for final demand goods moved down 0.4% in October, the fourth consecutive decrease. Leading the decline in October, the index for final demand goods less foods and energy fell 0.3%. Prices for final demand foods decreased 0.8%. The index for final demand energy was unchanged.
Product detail: Over one-third of the October decline in the final demand goods index is attributable to prices for light motor trucks, which fell 1.8%. The indexes for chicken eggs, iron and steel scrap, beef and veal, boxed meat, and electric power also moved lower. In contrast, gasoline prices rose 3.8%. The indexes for pharmaceutical preparations and corn also advanced. 
Click image for larger version
Month-over-month changes in the not-seasonally adjusted price indexes we track were mixed in October, but all fell on a year-over-year basis. 
Click image for larger version
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.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.