July 2022 Consumer and Producer Price Indices (incl. Forest Products)

Click image for larger version

Consumer Price Index

The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July (+0.2% expected) after rising 1.3% in June. The gasoline index fell 7.7% in July and offset increases in the food and shelter indexes, resulting in the all-items index being unchanged over the month. The energy index fell 4.6% over the month as the indexes for gasoline and natural gas declined, but the index for electricity increased. The food index continued to rise, increasing 1.1% over the month as the food at home index rose 1.3%. 

The index for all items less food and energy rose 0.3% in July, a smaller increase than in April, May, or June. The indexes for shelter, medical care, motor vehicle insurance, household furnishings and operations, new vehicles, and recreation were among those that increased over the month. There were some indexes that declined in July, including those for airline fares, used cars and trucks, communication, and apparel.

The all-items index increased 8.5% for the 12 months ending July, a smaller figure than the 9.1% increase for the period ending June. The all items less food and energy index rose 5.9% over the last 12 months. The energy index increased 32.9% for the 12 months ending July, a smaller increase than the 41.6% increase for the period ending June. The food index increased 10.9% over the last year, the largest 12-month increase since the period ending May 1979.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) fell 0.5% in July (+0.3% expected). This decline followed advances of 1.0% in June and 0.8% in May. On an unadjusted basis, final demand prices moved up 9.8% for the 12 months ended in July.

In July, the decrease in the index for final demand is attributable to a 1.8% decline in prices for final demand goods. In contrast, the index for final demand services advanced 0.1%.

Prices for final demand less foods, energy, and trade services moved up 0.2% in July following a 0.3% rise in June. For the 12 months ended in July, the index for final demand less foods, energy, and trade services increased 5.8%.

Final Demand

Final demand goods: The index for final demand goods fell 1.8% in July, the largest decline since moving down 2.7% in April 2020. The July decrease can be traced to a 9.0% drop in prices for final demand energy. Conversely, the indexes for final demand foods and for final demand goods less foods and energy rose 1.0% and 0.2%, respectively.

Product detail: Eighty percent of the July decline in the index for final demand goods is attributable to gasoline prices, which fell 16.7%. The indexes for diesel fuel, gas fuels, oilseeds, iron and steel scrap, and grains also moved lower. In contrast, prices for chicken eggs jumped 43.1%. The indexes for industrial chemicals and for electric power also increased.

Final demand services: The index for final demand services inched up 0.1% in July, the third consecutive increase. Leading the July advance, margins for final demand trade services rose 0.3%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services moved up 0.4%. Conversely, final demand services less trade, transportation, and warehousing decreased 0.1%.

Product detail: Leading the July increase in prices for final demand services, margins for fuels and lubricants retailing rose 12.3%. The indexes for services related to securities brokerage and dealing (partial), hospital outpatient care, automobiles and automobile parts retailing, and transportation of passengers (partial) also moved higher. In contrast, prices for portfolio management declined 7.9%. The indexes for securities brokerage, dealing, and investment advice; food and alcohol retailing; and long-distance motor carrying also fell.

Click image for larger version

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

Click image for larger version

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purposes of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.