April 2021 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 0.8% in April (+0.2% expected) after rising 0.6% in March. The index for used cars and trucks rose 10.0% in April. This was the largest one-month increase since the series began in 1953, and it accounted for over a third of the seasonally adjusted all-items increase. The food index increased in April, rising 0.4% as the indexes for food at home and food away from home both increased. The energy index decreased slightly, as a decline in the index for gasoline in April more than offset increases in the indexes for electricity and natural gas.

The index for all items less food and energy rose 0.9% in April, its largest monthly increase since April 1982. Nearly all major component indexes increased in April. Along with the index for used cars and trucks, the indexes for shelter, airline fares, recreation, motor vehicle insurance, and household furnishings and operations were among the indexes with a large impact on the overall increase.  

The all-items index rose 4.2% for the 12 months ending April, the largest 12-month increase since a 4.9% increase for the period ending September 2008. Similarly, the index for all items less food and energy rose 3.0% over the last12 months, a larger increase than the 1.6% rise over the 12 month period ending in March. The energy index rose 25.1% over the last 12-months, and the food index increased 2.4%.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.6% in April (+0.3% expected). Final demand prices rose 1.0% in March and 0.5% in February. About two-thirds of the April advance in the final demand index can be traced to a 0.6% increase in prices for final demand services. The index for final demand goods also moved up 0.6%.

The final demand index moved up 6.2% for the 12 months ended in April, the largest advance since 12-month data were first calculated in November 2010.The index for final demand less foods, energy, and trade services rose 0.7% in April following an increase of 0.6% in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services moved up 4.6%, the largest advance since 12-month data were first calculated in August 2014.

Final Demand

Final demand services: Prices for final demand services rose 0.6% in April, the fourth consecutive advance. Half of the broad-based increase in April is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.5%. Margins for final demand trade services also rose 0.5%, and the index for final demand transportation and warehousing services jumped 2.1%. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final demand services in April, prices for portfolio management rose 1.5%. The indexes for airline passenger services; food retailing; fuels and lubricants retailing; physician care; and hardware, building materials, and supplies retailing also moved higher. Conversely, margins for machinery and vehicle wholesaling fell 5.6%. The indexes for apparel wholesaling and for securities brokerage, dealing, investment advice, and related services also declined.

Final demand goods: Prices for final demand goods climbed 0.6% in April, after rising 1.7% in March. Leading the April advance, the index for final demand goods less foods and energy increased 1.0%. Prices for final demand foods moved up 2.1%. In contrast, the index for final demand energy fell 2.4%.

Product detail: A major factor in the April increase in prices for final demand goods was the index for steel mill products, which jumped 18.4%. Prices for beef and veal, pork, residential natural gas, plastic resins and materials, and dairy products also moved higher. Conversely, the index for gasoline fell 3.4%. Prices for chicken eggs and for carbon steel scrap also declined.

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The not-seasonally adjusted price indexes we track all rose 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.