October 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 0.4% in October (+0.7% expected), the same increase as in September. The index for shelter contributed over half of the monthly all-items increase, with the indexes for gasoline and food also increasing. The energy index increased 1.8% over the month as the gasoline index and the electricity index rose, but the natural gas index decreased. The food index increased 0.6% over the month with the food at home index rising 0.4%.

The index for all items less food and energy rose 0.3% in October, after rising 0.6% in September. The indexes for shelter, motor vehicle insurance, recreation, new vehicles, and personal care were among those that increased over the month. Indexes which declined in October included the used cars and trucks, medical care, apparel, and airline fares indexes.

The all-items index increased 7.7% for the 12 months ending October, this was the smallest 12-month increase since the period ending January 2022. The index for all items less food and energy rose 6.3% over the last 12 months. The energy index increased 17.6% for the 12 months ending October, and the food index increased 10.9% over the last year; all of these increases were smaller than for the period ending September.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.2% in October (+0.5% expected). Final demand prices rose 0.2% in September and were unchanged in August. On an unadjusted basis, the index for final demand advanced 8.0% for the 12 months ended in October.

In October, the rise in the index for final demand can be attributed to a 0.6% advance in prices for final demand goods. In contrast, the index for final demand services decreased 0.1%.

Prices for final demand less foods, energy, and trade services advanced 0.2% in October following a 0.3% rise in September. For the 12 months ended in October, the index for final demand less foods, energy, and trade services increased 5.4%.

Final Demand

Final demand goods: The index for final demand goods moved up 0.6% in October, the largest advance since a 2.2% rise in June. Most of the October increase can be traced to a 2.7% jump in prices for final demand energy. The index for final demand foods advanced 0.5%. Conversely, prices for final demand goods less foods and energy decreased 0.1%.

Product detail: In October, 60% of the increase in prices for final demand goods is attributable to the index for gasoline, which rose 5.7%. Prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced. In contrast, the index for passenger cars declined 1.5%. (In accordance with usual practice, most new-model-year passenger cars and light motor trucks were introduced into the PPI in October. See Report on Quality Changes for 2023 Model Vehicles at www.bls.gov/web/ppi/ppimotveh.htm.) Prices for gas fuels and for processed young chickens also fell.

Final demand services: The index for final demand services fell 0.1% in October, the first decline since moving down 0.2% in November 2020. Leading the October decrease, margins for final demand trade services fell 0.5%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services moved down 0.2%. Conversely, the index for final demand services less trade, transportation, and warehousing increased 0.2%.

Product detail: A major factor in the October decrease in prices for final demand services was the index for fuels and lubricants retailing, which fell 7.7%. The indexes for portfolio management, long-distance motor carrying, automobile retailing (partial), and professional and commercial equipment wholesaling also moved lower. In contrast, prices for hospital inpatient care increased 0.8%. The indexes for services related to securities brokerage and dealing (partial), apparel wholesaling, and airline passenger services also rose.

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All not-seasonally adjusted price indexes we track were “in the red” on a MoM basis but 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.