October 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 0.9% in October (+0.5% expected) after rising 0.4% in September. The monthly all-items seasonally adjusted increase was broad-based, with increases in the indexes for energy, shelter (+0.5%), food, used cars and trucks (+2.5%), and new vehicles (+1.4%) among the larger contributors. The energy index rose 4.8% over the month, as the gasoline index increased 6.1% and the other major energy component indexes also rose. The food index increased 0.9% as the index for food at home rose 1.0%.

The index for all items less food and energy rose 0.6% in October after increasing 0.2% in September. Most component indexes increased over the month. Along with shelter, used cars and trucks, and new vehicles, the indexes for medical care, for household furnishing and operations, and for recreation all increased in October. The indexes for airline fares and for alcoholic beverages were among the few to decline over the month. 

The all-items index rose 6.2% for the 12 months ending October, the largest 12-month increase since the period ending November 1990. The index for all items less food and energy rose 4.6% over the last 12 months, the largest 12-month increase since the period ending August 1991. The energy index rose 30.0% over the last 12 months, and the food index increased 5.3%.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.6% in October (+0.6% expected). Final demand prices moved up 0.5% in September and 0.7% in August. Over 60% of the October increase in the index for final demand can be traced to a 1.2% rise in prices for final demand goods. The index for final demand services moved up 0.2%, and prices for final demand construction advanced 6.6%. Prices for final demand less foods, energy, and trade services moved up 0.4% in October after increasing 0.1% in September.

On an unadjusted basis, the final demand index rose 8.6% for the 12 months ended in October. For the 12 months ended in October, the index for final demand less foods, energy, and trade services rose 6.2%.

Final Demand

Final demand goods: The index for final demand goods moved up 1.2% in October following a 1.3% increase in September. In October, three-quarters of the advance can be attributed to a 4.8% jump in prices for final demand energy. The index for final demand goods less foods and energy moved up 0.5%. Conversely, prices for final demand foods decreased 0.1%.

Product detail: One-third of the October advance in the index for final demand goods can be traced to prices for gasoline, which rose 6.7%. The indexes for diesel fuel, fresh and dry vegetables, gas fuels, jet fuel, and plastic resins and materials also moved higher. In contrast, prices for beef and veal decreased 10.3%. The indexes for light motor trucks and for residential electric power also fell.

Final demand services: Prices for final demand services moved up 0.2% in October, the tenth consecutive advance. Nearly two-thirds of the increase in October can be attributed to the index for final demand trade services, which rose 0.4%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services advanced 1.7%. Conversely, the index for final demand services less trade, transportation, and warehousing fell 0.1%.

Product detail: Over 80% of the October increase in prices for final demand services can be traced to margins for automobiles and automobile parts retailing, which rose 8.9%. The indexes for apparel, footwear, and accessories retailing; truck transportation of freight; food and alcohol retailing; hospital outpatient care; and machinery and equipment parts and supplies wholesaling also moved up. In contrast, prices for securities brokerage, dealing, investment advice, and related services fell 6.6%. The indexes for fuels and lubricants retailing and for portfolio management 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.