September 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) was unchanged in September (+0.1% expected) after rising 0.1% in August. Increases in the indexes for shelter and food were offset by declines in the indexes for energy and used cars and trucks to result in the seasonally adjusted all items index being flat. The energy index fell 1.4% as the gasoline index declined 2.4%. The food index increased 0.1% in September after being unchanged in each of the prior 3 months.  

The index for all items less food and energy rose 0.1% in September after increasing 0.3% in each of the last 3 months. Along with the shelter index (+0.3%), the indexes for medical care (+0.4%), household furnishings and supplies (+0.3%), and motor vehicle insurance (+0.3%) all rose in September. The indexes for used cars and trucks (-1.6%), apparel (-0.4%), new vehicles (-0.1%), and communication (-1.2%) all declined.  

The all items index increased 1.7% for the 12 months ending September, the same increase as for the 12 months ending August. The index for all items less food and energy rose 2.4% over the last 12 months, also the same increase as the period ending August. The food index increased 1.8% over the last year, while the energy index decreased 4.8%; medical care rose by 4.4%. 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) decreased 0.3% in September (+0.1% expected). Final demand prices rose 0.1% in August and 0.2% in July. In September, the index for final demand services decreased 0.2%, and prices for final demand goods dropped 0.4%. The index for final demand less foods, energy, and trade services was unchanged in September after rising 0.4% in August.

On an unadjusted basis, the final demand index advanced 1.4% for the 12 months ended in September. Prices for final demand less foods, energy, and trade services advanced 1.7%.

Final Demand

Final demand services: The index for final demand services fell 0.2% in September following a 0.3% increase in August. Leading the decline, the index for final demand trade services decreased 1.0%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services also moved down 1.0%. In contrast, the index for final demand services less trade, transportation, and warehousing climbed 0.3%.

Product detail: Nearly half of the September decline in prices for final demand services can be traced to the index for machinery and vehicle wholesaling, which fell 2.7%. The indexes for automotive fuels and lubricants retailing; apparel, jewelry, footwear, and accessories retailing; airline passenger services; gaming receipts (partial); and professional and commercial equipment wholesaling also moved lower. Conversely, prices for hospital outpatient care rose 1.1%. The indexes for bundled wired telecommunications access services and for food and alcohol wholesaling also advanced.

Final demand goods: The index for final demand goods decreased 0.4% in September after a 0.5% drop in August. Most of the September decline is attributable to prices for final demand energy, which fell 2.5%. The index for final demand goods less foods and energy edged down 0.1%. In contrast, prices for final demand foods moved up 0.3%.

Product detail: Three-fourths of the September decrease in the index for final demand goods can be traced to prices for gasoline, which fell 7.2%. The indexes for electric power, iron and steel scrap, basic organic chemicals, fresh and dry vegetables, and light motor trucks also moved lower. Conversely, prices for meats rose 1.9%. The indexes for liquefied petroleum gas and pharmaceutical preparations also increased. 

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The not-seasonally adjusted price indexes we track were mixed on a MoM basis; all were lower YoY. 

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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.