November 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) rose 0.3% in November (+0.2% expected), after rising 0.4% in October. Increases in the shelter and energy indexes were major factors in the seasonally adjusted monthly increase of the all items index. Increases in the indexes for medical care, for recreation, and for food also contributed to the overall increase. The gasoline index rose 1.1% in November and the other major energy component indexes also increased. The food index rose 0.1%, with the indexes for both food at home and food away from home increasing over the month.

The index for all items less food and energy rose 0.2% in November, the same increase as in October. Along with the indexes for shelter, for medical care, and for recreation, the indexes for used cars and trucks and for apparel also rose in November. The new vehicles index fell in November, as did the index for airline fares.

The all items index increased 2.1% for the 12 months ending November, a larger rise than the 1.8% increase for the period ending October. The index for all items less food and energy rose 2.3% over the last 12 months. The food index rose 2.0% over the last l2 months, while the energy index declined 0.6% over the last year.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) was unchanged in November (+0.2% expected). Final demand prices increased 0.4% in October and fell 0.3% in September. In November, a 0.3% rise in prices for final demand goods offset a 0.3% decrease in the index for final demand services.

The final demand index advanced 1.1% for the 12 months ended in November. The index for final demand less foods, energy, and trade services was unchanged in November after inching up 0.1% in October. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 1.3%, the smallest advance since climbing 1.3% in the 12 months ended September 2016.

Final Demand

Final demand goods: The index for final demand goods increased 0.3% in November following a 0.7% advance in October. Half of the broad-based rise in November is attributable to a 1.1% advance in prices for final demand foods. The indexes for final demand energy and for final demand goods less foods and energy moved up 0.6% and 0.2%, respectively.

Product detail: A major factor in the increase in prices for final demand goods was the index for meats, which climbed 3.9%. Prices for gasoline, chicken eggs, diesel fuel, fresh and dry vegetables, and tobacco products also moved higher. In contrast, the index for residential electric power fell 0.6%. Prices for unprocessed finfish and industrial chemicals also declined.

Final demand services: The index for final demand services moved down 0.3% in November, the largest decrease since falling 0.3% in February 2017. Over two-thirds of the broad-based decline in November can be traced to margins for final demand trade services, which decreased 0.6%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services fell 0.1% and 0.3%, respectively.

Product detail: Margins for food wholesaling, which dropped 5.0%, were a major factor in the November decline in prices for final demand services. The indexes for hospital outpatient care; machinery and vehicle wholesaling; airline passenger services; professional and commercial equipment wholesaling; and securities brokerage, dealing, investment advice, and related services also moved lower. Conversely, prices for traveler accommodation services increased 2.6%. The indexes for machinery and equipment parts and supplies wholesaling and for long-distance motor carrying also rose. 

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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.