September 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 0.4% in September (+0.3% expected) after rising 0.3% in August. The indexes for food and shelter rose in September and together contributed more than half of the monthly all-items seasonally adjusted increase. The index for food rose 0.9%, with the index for food at home increasing 1.2%. The energy index increased 1.3%, with the gasoline index rising 1.2%.

The index for all items less food and energy rose 0.2% in September, after increasing 0.1% in August. Along with the index for shelter, the indexes for new vehicles, household furnishings and operations, and motor vehicle insurance also rose in September. The indexes for airline fares, apparel, and used cars and trucks all declined over the month. 

The all-items index rose 5.4% for the 12 months ending September, compared to a 5.3% rise for the period ending August. The index for all items less food and energy rose 4.0% over the last 12 months, the same increase as the period ending August. The energy index rose 24.8% over the last 12 months, and the food index increased 4.6% over that period.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.5% in September (+0.5% expected). Final demand prices moved up 0.7% in August and 1.0% in July. Nearly 80% of the September increase in the index for final demand can be traced to a 1.3% rise in prices for final demand goods. The index for final demand services moved up 0.2%.

The final demand index rose 8.6% for the 12 months ended in September, the largest advance since 12-month data were first calculated in November 2010. Prices for final demand less foods, energy, and trade services moved up 0.1% in September after increasing 0.3% in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services rose 5.9%.

Final Demand

Final demand goods: The index for final demand goods moved up 1.3% in September, the largest increase since a 1.5% rise in May. In September, 40% of the broad-based advance can be attributed to a 2.8% jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods also moved up, 0.6% and 2.0%, respectively.

Product detail: Leading the advance in the index for final demand goods, prices for gasoline rose 3.9%. The indexes for beef and veal, residential electric power, fresh and dry vegetables, gas fuels, and primary basic organic chemicals also moved higher. In contrast, prices for plastic resins and materials decreased 3.9%. The indexes for corn and for residual fuels also fell.

Final demand services: Prices for final demand services moved up 0.2% in September, the ninth consecutive advance. Leading the increase in September, the index for final demand trade services rose 0.9%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing advanced 0.2%. Conversely, the index for final demand transportation and warehousing services fell 4.0%.

Product detail: Over two-thirds of the September increase in prices for final demand services can be traced to margins for fuels and lubricants retailing, which rose 11.6%. The indexes for machinery and equipment wholesaling, hospital inpatient care, automobiles and automobile parts retailing, portfolio management, and truck transportation of freight also moved up. In contrast, prices for airline passenger services fell 16.9%. The indexes for health, beauty, and optical goods retailing and for bundled wired telecommunications access services also declined.

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The not-seasonally adjusted price indexes we track were mixed on both a MoM and YoY basis.

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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.