November 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% (+0.7% expected) in November after rising 0.9% in October. The monthly all-items seasonally adjusted increase was the result of broad increases in most component indexes, similar to last month. The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles were among the larger contributors. The energy index rose 3.5% in November as the gasoline index increased 6.1% and the other major energy component indexes also rose. The food index increased 0.7% as the index for food at home rose 0.8%.

The index for all items less food and energy rose 0.5% in November following a 0.6% increase in October. Along with shelter, used cars and trucks, and new vehicles, the indexes for household furnishings and operations, apparel, and airline fares were among those that increased. The indexes for motor vehicle insurance, recreation, and communication all declined in November.

The all-items index rose 6.8% for the 12 months ending November, the largest 12-month increase since the period ending June 1982. The index for all items less food and energy rose 4.9% over the last 12 months, while the energy index rose 33.3% over the last year, and the food index increased 6.1%. These changes are the largest 12-month increases in at least 13 years in the respective series.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.8% in November (+0.5% expected). Final demand prices moved up 0.6% in each of the three prior months. On an unadjusted basis, the final demand index rose 9.6% for the 12 months ended in November, the largest advance since 12-month data were first calculated in November 2010.

In November, the index for final demand services rose 0.7% and prices for final demand goods increased 1.2%.

The index for final demand less foods, energy, and trade services moved up 0.7% in November, the largest rise since climbing 0.8% in July. For the 12 months ended in November, prices for final demand less foods, energy, and trade services increased 6.9%, the largest advance since 12-month data were first calculated in August 2014.

Final Demand

Final demand services: The index for final demand services rose 0.7% in November, the eleventh consecutive advance. Over half of the broad-based increase in November can be traced to prices for final demand services less trade, transportation, and warehousing, which climbed 0.6%. The indexes for final demand trade services and for final demand transportation and warehousing services also moved higher, rising 0.6% and 1.9%, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Leading the November increase in the index for final demand services, prices for portfolio management advanced 2.9%. The indexes for guestroom rental; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; airline passenger services; and transportation of freight and mail also moved higher. In contrast, margins for chemicals and allied products wholesaling fell 1.3%. The indexes for furnishings wholesaling and for bundled wired telecommunications access services also declined.

Final demand goods: The index for final demand goods rose 1.2% in November following a 1.3% increase in October. In November, advances were broad based. Prices for final demand goods less foods and energy climbed 0.8%, the index for final demand energy jumped 2.6%, and prices for final demand foods moved up 1.2%.

Product detail: Within final demand goods in November, prices for iron and steel scrap rose 10.7%. The indexes for gasoline, fresh fruits and melons, fresh and dry vegetables, industrial chemicals, and jet fuel also moved higher. Conversely, prices for diesel fuel decreased 2.6%. The indexes for processed young chickens and for light motor trucks also fell.

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