November 2020 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 0.2% in November (0.1% expected). The increase was broad-based, with no component accounting for more than a quarter of the increase. The food index declined in November, as a decrease in the food at home index more than offset a small increase in the food away from home index. The index for energy rose in November, as increases in indexes for natural gas and electricity more than offset a decline in the index for gasoline.

The index for all items less food and energy increased 0.2% in November after being unchanged the prior month. The indexes for lodging away from home, household furnishings and operations, recreation, apparel, airline fares, and motor vehicle insurance all increased in November. The indexes for used cars and trucks, medical care, and new vehicles all declined over the month.

The all-items index rose 1.2% for the 12 months ending November, the same increase as for the period ending October. The index for all items less food and energy rose 1.6% over the last 12 months, also the same increase as the period ending October. The food index rose 3.7% over the last 12 months, while the energy index fell 9.4%.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) advanced 0.1% in November (+0.1% expected). Final demand prices rose 0.3% in October and 0.4% in September. The rise can be traced to a 0.4% increase in prices for final demand goods. The index for final demand services was unchanged.

On an unadjusted basis, the final demand index increased 0.8% for the 12 months ended in November, the largest advance since moving up 1.1% for the 12 months ended in February. The index for final demand less foods, energy, and trade services advanced 0.1% in November, the seventh consecutive increase. For the 12 months ended in November, prices for final demand less foods, energy, and trade services moved up 0.9%, the largest rise since a 1.0% increase for the 12 months ended in March.

Final Demand

Final demand goods: The index for final demand goods rose 0.4% in November, the seventh consecutive advance. Nearly half of the broad-based November increase can be traced to prices for final demand energy, which moved up 1.2%. The indexes for final demand goods less foods and energy and for final demand foods rose 0.2% and 0.5%, respectively.

Product detail: In November, a major factor in the increase in prices for final demand goods was the index for diesel fuel, which advanced 8.4%. Prices for meats, processed young chickens, residential electric power, residential natural gas, and tobacco products also moved higher. In contrast, the gasoline index fell 1.9%. Prices for fresh fruits and melons and for pharmaceutical preparations also decreased.

Final demand services: The index for final demand services was unchanged in November after advancing 0.2% in October. In November, prices for final demand services less trade, transportation, and warehousing climbed 0.2%. Conversely, the indexes for final demand trade services and for final demand transportation and warehousing services decreased 0.3% and 0.9%, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: In November, prices for outpatient care (partial) increased 0.4%. The indexes for apparel, jewelry, footwear, and accessories retailing; machinery and equipment parts and supplies wholesaling; truck transportation of freight; and chemicals and allied products wholesaling also moved higher. In contrast, margins for machinery and vehicle wholesaling fell 7.6%. The indexes for transportation of passengers (partial); fuels and lubricants retailing; hardware, building materials, and supplies retailing; and securities brokerage, dealing, and investment advice also decreased.

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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.