November 2017 Consumer and Producer Price Indices (incl. Forest Products)

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Consumer Price Index

The seasonally adjusted consumer price index for all urban consumers (CPI-U) rose 0.4% in November (+0.4% expected). The energy index rose 3.9% and accounted for about three-fourths of the all-items increase. The gasoline index increased 7.3%, and the other energy component indexes also rose. The food index was unchanged in November, with the index for food at home declining slightly.

The index for all items less food and energy increased 0.1% in November. The shelter index continued to rise (+0.2% MoM; +3.2% YoY), and the indexes for motor vehicle insurance, used cars and trucks, and new vehicles also increased. The indexes for apparel, airline fares, and household furnishings and operations all declined in November.

The all-items index rose 2.2% for the 12 months ending November. The index for all items less food and energy rose 1.7%, a slight decline from the 1.8% increase for the period ending October. The energy index rose 9.4% over the last 12 months, and the food index rose 1.4%.

Producer Price Index

The seasonally adjusted producer price index for final demand (PPI) increased 0.4% in November (+0.3 expected). Final demand prices also moved up 0.4% in both October and September. On an unadjusted basis, the final demand index rose 3.1% for the 12 months ended in November, the largest advance since a 3.1% increase for the 12 months ended January 2012.

In November, three-fourths of the rise in the final demand index is attributable to a 1.0% increase in prices for final demand goods. The index for final demand services climbed 0.2%.

The index for final demand less foods, energy, and trade services rose 0.4% in November, the largest advance since increasing 0.6% in April. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 2.4%.

Final Demand

Final demand goods: The index for final demand goods jumped 1.0% in November, the largest advance since a 1.0% increase in January. Over three-fourths of the broad-based November rise can be traced to prices for final demand energy, which climbed 4.6%. The indexes for final demand goods less foods and energy and for final demand foods both advanced 0.3%.

Product detail: Over two-thirds of the November increase in the index for final demand goods is attributable to prices for gasoline, which jumped 15.8%. The indexes for light motor trucks, pharmaceutical preparations, beef and veal, residential electric power, and jet fuel also moved higher. In contrast, prices for processed young chickens fell 5.7%. The indexes for ethanol and commercial electric power also declined.

Final demand services: Prices for final demand services advanced 0.2% in November, the third consecutive rise. Leading the November increase, the index for final demand services less trade, transportation, and warehousing moved up 0.4%. Prices for final demand transportation and warehousing services climbed 0.6%. Conversely, margins for final demand trade services decreased 0.3%. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1%. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; food and alcohol retailing; chemicals and allied products wholesaling; and apparel, footwear, and accessories retailing also moved higher. In contrast, margins for machinery and equipment wholesaling declined 1.9%. The indexes for fuels and lubricants retailing and for bundled wired telecommunication access services also fell. 

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All of the not-seasonally adjusted price indexes we track rose on MoM and YoY bases. 

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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.