April 2019 Consumer and Producer Price Indices (incl. Forest Products)

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Consumer Price Index

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in April (+0.4% expected). The gasoline index continued to increase, rising 5.7% and accounting for over two-thirds of the seasonally adjusted all-items monthly increase. The index for energy rose 2.9%, although the index for natural gas declined and the index for electricity was unchanged. The food index fell in April, its first monthly decline since June 2017. 

The index for all items less food and energy increased 0.1% for the third consecutive month. The indexes for shelter, medical care, education, and new vehicles all rose in April. The indexes for used cars and trucks, apparel, and household furnishings and operations were among those that declined over the month.   

The all items index increased 2.0% for the 12 months ending April, the largest 12-month increase since the period ending November 2018. The index for all items less food and energy rose 2.1% over the last 12 months, and the food index rose 1.8%. The energy index increased 1.7% over the past year after posting 12-month declines the past 4 months.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) rose 0.2% in April (+0.3% expected). Final demand prices advanced 0.6% in March and 0.1% in February. Leading the April rise in the index for final demand, prices for final demand goods climbed 0.3%. The index for final demand services edged up 0.1%, and prices for final demand construction advanced 1.6%. The index for final demand less foods, energy, and trade services moved up 0.4% in April, the largest increase since rising 0.5% in January 2018.

On an unadjusted basis, the final demand index increased 2.2% for the 12 months ended in April; prices for final demand less foods, energy, and trade services advanced 2.2%.

Final Demand

Final demand goods: The index for final demand goods moved up 0.3% in April, the third consecutive increase. The April advance can be traced to prices for final demand energy, which rose 1.8%. In contrast, the index for final demand foods fell 0.2%. Prices for final demand goods less foods and energy were unchanged.

Product detail: Most of the April rise in the index for final demand goods is attributable to prices for gasoline, which increased 5.9%. The indexes for meats; search, detection, navigation, guidance systems, and related equipment; electric power; pharmaceutical preparations; and processed young chickens also moved higher. Conversely, prices for fresh and dry vegetables decreased 11.6%. The indexes for thermoplastic resins and materials and for liquefied petroleum gas also declined.

Final demand services: Prices for final demand services inched up 0.1% in April following a 0.3% advance in March. Leading the increase in April, the index for final demand services less trade, transportation, and warehousing rose 0.3%. Prices for final demand transportation and warehousing services climbed 1.0%. In contrast, margins for final demand trade services fell 0.5%. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Most of the April advance in the index for final demand services can be traced to prices for portfolio management, which jumped 5.3%. The indexes for hospital outpatient care; transportation of passengers (partial); machinery, equipment, parts, and supplies wholesaling; and fuels and lubricants retailing also moved higher. Conversely, margins for food and alcohol retailing decreased 3.1%. The indexes for traveler accommodation services; health, beauty, and optical goods retailing; and long-distance motor carrying also declined. 

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The not-seasonally adjusted price indexes we track were mixed on both 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.