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The
seasonally adjusted consumer price index for all urban consumers (CPI-U) increased
0.1% in December (+0.1% expected).
An increase of 0.4% in the shelter index accounted for almost 80% of the MoM
all-items increase. The food index rose in December, with the indexes for food
at home and food away from home both increasing. The energy index, which rose
sharply in November, declined in December as the gasoline index decreased.
The
index for all items less food and energy increased 0.3% in December, its
largest increase since January 2017. Along with the shelter index, the indexes
for medical care, used cars and trucks, new vehicles, and motor vehicle
insurance were among those that increased in December. The indexes for apparel,
airline fares, and tobacco all declined over the month.
The
all-items index rose 2.1% for the 12 months ending December, compared to 2.2%
for the 12 months ending November. The index for all items less food and energy
increased 1.8% over the last year; the 12-month change has now been either 1.7
or 1.8% for eight consecutive months. The food index rose 1.6% over the past
year; the index for energy increased 6.9%, with all of its major component
indexes rising during 2017.
The
seasonally adjusted producer price index for final demand (PPI) fell 0.1% in
December (+0.2 expected).
Final demand prices advanced 0.4% in both November and October. On an
unadjusted basis, the final demand index climbed 2.6% in 2017 after a 1.7% rise
in 2016.
Most
of the December decline in the final demand index is attributable to a 0.2%
decrease in prices for final demand services. The index for final demand goods
was unchanged.
Prices
for final demand less foods, energy, and trade services edged up 0.1% in
December after rising 0.4% in November. In 2017, the index for final demand
less foods, energy, and trade services climbed 2.3% following a 1.8% advance in
2016.
Final Demand
Final
demand services: The index for final demand services moved down 0.2% in December
following nine consecutive increases. Most of the decrease can be traced to a
0.6% decline in margins for final demand trade services. (Trade indexes measure
changes in margins received by wholesalers and retailers.) Prices for final
demand transportation and warehousing services fell 0.4%. Conversely, the index
for final demand services less trade, transportation, and warehousing inched up
0.1%.
Product
detail: A major factor in the December decline in prices for final demand
services was the index for automotive fuels and lubricants retailing, which
fell 10.7%. The indexes for loan services (partial); airline passenger
services; apparel, footwear, and accessories retailing; legal services; and
health, beauty, and optical goods retailing also moved lower. In contrast,
prices for inpatient care advanced 0.7%. The indexes for truck transportation
of freight and apparel wholesaling also increased.
Final
demand goods: Prices for final demand goods were unchanged in December
following a 1.0% increase in November. The index for final demand less foods
and energy advanced 0.2%. Conversely, prices for final demand foods declined
0.7%. The index for final demand energy was unchanged.
Product
detail: In December, prices for basic organic chemicals advanced 3.9%. The
indexes for jet fuel, diesel fuel, home heating oil, and processed young
chickens also moved higher. In contrast, prices for beef and veal fell 6.3%.
The indexes for gasoline, fresh and dry vegetables, liquefied petroleum gas,
and turbines and turbine generator sets also moved lower.
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The
not-seasonally adjusted price indexes we track were mixed 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.
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