August 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) rose 0.1% in August (-0.1% expected) after being unchanged in July. Over the last 12 months, the all-items index increased 8.3% before seasonal adjustment.

Increases in the shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all-items increase. These increases were mostly offset by a 10.6% decline in the gasoline index. The food index continued to rise, increasing 0.8% over the month as the food at home index rose 0.7%. The energy index fell 5.0% over the month as the gasoline index declined, but the electricity and natural gas indexes increased.

The index for all items less food and energy rose 0.6% in August, a larger increase than in July. The indexes for shelter, medical care, household furnishings and operations, new vehicles, motor vehicle insurance, and education were among those that increased over the month. There were some indexes that declined in August, including those for airline fares, communication, and used cars and trucks.

The all-items index increased 8.3% for the 12 months ending August, a smaller figure than the 8.5% increase for the period ending July. The all-items index less food and energy rose 6.3% over the last 12 months. The energy index increased 23.8% for the 12 months ending August, a smaller increase than the 32.9% increase for the period ending July. The food index increased 11.4% 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 0.1% in August (-0.1% expected). Final demand prices decreased 0.4% in July and advanced 1.0% in June. On an unadjusted basis, the index for final demand moved up 8.7% for the 12 months ended in August.

In August, the decrease in the index for final demand is attributable to a 1.2% decline in prices for final demand goods. In contrast, the index for final demand services advanced 0.4%.

Prices for final demand less foods, energy, and trade services moved up 0.2% in August following a 0.1% rise in July. For the 12 months ended in August, the index for final demand less foods, energy, and trade services increased 5.6%.

Final Demand

Final demand goods: The index for final demand goods fell 1.2% in August after declining 1.7% in July. The August decrease can be traced to a 6.0% drop in prices for final demand energy. Conversely, the index for final demand goods less foods and energy rose 0.2%, while prices for final demand foods were unchanged.

Product detail: In August, over three-quarters of the decrease in prices for final demand goods is attributable to the index for gasoline, which fell 12.7%. Prices for diesel fuel, jet fuel, chicken eggs, primary basic organic chemicals, and home heating oil also declined. In contrast, the index for construction machinery and equipment increased 2.6%. Prices for beverages and beverage materials and for electric power also rose.

Final demand services: The index for final demand services moved up 0.4% in August, the fourth consecutive rise. Sixty percent of the August advance 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 also moved higher, rising 0.3%. Conversely, the index for final demand transportation and warehousing services decreased 0.2%.

Product detail: Forty percent of the increase in prices for final demand services can be attributed to margins for fuels and lubricants retailing, which rose 14.2%. The indexes for securities brokerage, dealing, investment advice, and related services; loan services (partial); transportation of passengers (partial); portfolio management; and chemicals and allied products wholesaling also moved higher. In contrast, prices for truck transportation of freight decreased 1.9%. The indexes for guestroom rental and for food and alcohol retailing also fell.

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Most of the not-seasonally adjusted price indexes we track retreated MoM, but all advanced YoY.

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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.