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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Tuesday, March 15, 2022

February 2022 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 February (+0.7% expected) after rising 0.6% in January. Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all-items increase. The gasoline index rose 6.6% in February and accounted for almost a third of the all-items monthly increase; other energy component indexes were mixed. The food index rose 1.0% as the food at home index rose 1.4%; both were the largest monthly increases since April 2020. 

The index for all items less food and energy rose 0.5% in February following a 0.6% increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of indexes also contributing, including those for recreation, household furnishings and operations, motor vehicle insurance, personal care, and airline fares.  

The all-items index rose 7.9% for the 12 months ending February. The 12-month increase has been steadily rising and is now the largest since the period ending January 1982. The index of all items less food and energy rose 6.4%, the largest 12-month change since the period ending August 1982. The energy index rose 25.6% over the last year, and the food index increased 7.9%, the largest 12-month increase since the period ending July 1981.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.8% in February (+1.0% expected). This rise followed advances of 1.2% in January and 0.4% in December 2021. On an unadjusted basis, final demand prices moved up 10.0% for the 12 months ended in February.

In February, the advance in the index for final demand can be attributed to prices for final demand goods, which rose 2.4%. The index for final demand services was unchanged.

Prices for final demand less foods, energy, and trade services rose 0.2% in February following a 0.8% increase in January. For the 12 months ended in February, the index for final demand less foods, energy, and trade services moved up 6.6%.

Final Demand

Final demand goods: Prices for final demand goods jumped 2.4% in February, the largest advance since data were first calculated in December 2009. Two-thirds of the broad-based increase can be traced to an 8.2% rise in the index for final demand energy. Prices for final demand goods less foods and energy and for final demand foods also moved higher, 0.7% and 1.9%, respectively.

Product detail: Nearly 40% of the February increase in prices for final demand goods can be attributed to the index for gasoline, which rose 14.8%. Prices for diesel fuel, electric power, jet fuel, motor vehicles and equipment, and dairy products also advanced. In contrast, the index for fresh and dry vegetables decreased 9.4%. Prices for beef and veal and for hot rolled steel sheet and strip also moved lower.

Final demand services: Prices for final demand services were unchanged in February after a 1.0% increase in January. In February, a 1.9% rise in the index for final demand transportation and warehousing services and a 0.2% advance in margins for final demand trade services offset a 0.4% decrease in the index for final demand services less trade, transportation, and warehousing. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final demand services in February, prices for truck transportation of freight moved up 2.0%. The indexes for food and alcohol retailing, machinery and vehicle wholesaling, transportation of passengers (partial), and outpatient care (partial) also rose. Conversely, prices for portfolio management decreased 4.2%. The indexes for guestroom rental; apparel, jewelry, footwear, and accessories retailing; automobile retailing (partial); and residential real estate loans (partial) also declined.

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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.

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