June 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 1.3% in June (+1.1% expected) after rising 1.0% in May. The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors. The energy index rose 7.5% over the month and contributed nearly half of the all-items increase, with the gasoline index rising 11.2% and the other major component indexes also rising. The food index rose 1.0% in June, as did the food at home index.

The index for all items less food and energy rose 0.7% in June, after increasing 0.6% in the preceding two months. While almost all major component indexes increased over the month, the largest contributors were the indexes for shelter, used cars and trucks, medical care, motor vehicle insurance, and new vehicles. The indexes for motor vehicle repair, apparel, household furnishings and operations, and recreation also increased in June. Among the few major component indexes to decline in June were lodging away from home and airline fares.

The all-items index increased 9.1% for the 12 months ending June, the largest 12-month increase since the period ending November 1981. The index for all items less food and energy rose 5.9% over the last 12 months. The energy index rose 41.6% over the last year, the largest 12-month increase since the period ending April 1980. The food index increased 10.4% for the 12-months ending June, the largest 12-month increase since the period ending February 1981.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 1.1% in June (+0.8% expected). This rise followed advances of 0.9% in May and 0.4% in April. Three-fourths of the advance in the index for final demand was due to a 2.4% rise in prices for final demand goods. The index for final demand services increased 0.4%.

Final demand prices moved up 11.3% for the 12 months ended in June, the largest increase since a record 11.6% jump in March 2022.Prices for final demand less foods, energy, and trade services moved up 0.3% in June after advancing 0.4% in both May and April. For the 12 months ended in June, the index for final demand less foods, energy, and trade services rose 6.4%.

Final Demand

Final demand goods: The index for final demand goods moved up 2.4% in June, the sixth consecutive rise. Nearly 90% of the June increase can be traced to a 10.0% jump in prices for final demand energy. The indexes for final demand goods less foods and energy and for final demand foods advanced 0.5% and 0.1%, respectively.

Product detail: Over half of the June increase in the index for final demand goods is attributable to gasoline prices, which jumped 18.5%. The indexes for diesel fuel, electric power, residential natural gas, motor vehicles and equipment, and processed young chickens also moved higher. In contrast, prices for chicken eggs dropped 30.2%. The indexes for iron and steel scrap and for jet fuel also decreased.

Final demand services: The index for final demand services rose 0.4% in June after climbing 0.6% in May. Two-thirds of the broad-based advance in June can be traced to a 0.8% increase in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing and for final demand transportation and warehousing services also moved higher, 0.1% and 0.8%, respectively.

Product detail: Over 30% of the June advance in the index for final demand services can be traced to margins for food and alcohol retailing, which rose 3.8%. The indexes for machinery and equipment wholesaling, outpatient care (partial), transportation of passengers (partial), guestroom rental, and hospital inpatient care also increased. Conversely, prices for portfolio management declined 2.7%. The indexes for automobile retailing (partial) and for long-distance motor carrying also moved lower.

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

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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.