February 2023 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 February (+0.4% expected). The index for shelter (+0.8% MoM; +8.1% YoY) was the largest contributor to the monthly all-items increase, accounting for over 70% of the increase, with the indexes for food, recreation, and household furnishings and operations also contributing. The food index increased 0.4% over the month with the food at home index rising 0.3%. The energy index decreased 0.6% over the month as the natural gas and fuel oil indexes both declined.

The index for all-items less food and energy rose 0.5% in February, after rising 0.4% in January. Categories which increased in February include shelter, recreation, household furnishings and operations, and airline fares. The index for used cars and trucks and the index for medical care were among those that decreased over the month.

The all-items index increased 6.0% for the 12 months ending February; this was the smallest 12-month increase since the period ending September 2021. The index for all items less food and energy rose 5.5% over the last 12 months, its smallest 12-month increase since December 2021. The energy index increased 5.2% for the 12 months ending February, and the food index increased 9.5% over the last year.

Producer Price Index

The Producer Price Index for Final Demand (PPI-FD) decreased 0.1% in February (+0.3% expected). Final demand prices advanced 0.3% in January and declined 0.2% in December 2022. On an unadjusted basis, the final demand index rose 4.6% for the 12 months ended in February.

In February, the decline in the final demand index was led by prices for final demand goods, which fell 0.2%. The index for final demand services edged down 0.1%.

The index for final demand less foods, energy, and trade services increased 0.2% in February after rising 0.5% in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services advanced 4.4%.

Final Demand

Final demand goods: The index for final demand goods fell 0.2% in February following a 1.2% advance in January. A 2.2% decline in prices for final demand foods was a major factor in the February decrease. The index for final demand energy moved down 0.2%. In contrast, prices for final demand goods less foods and energy rose 0.3%.

Product detail: Over 80% of the February decline in the index for final demand goods can be attributed to a 36.1% drop in prices for chicken eggs. The indexes for residential natural gas, fresh and dry vegetables, diesel fuel, home heating oil, and primary basic organic chemicals also fell. Conversely, prices for iron and steel scrap advanced 10.6%. The indexes for gasoline and for sugar and confectionery products also increased.

Final demand services: The index for final demand services inched down 0.1% in February, the same as in January. Leading the February decline, margins for final demand trade services fell 0.8%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand transportation and warehousing services decreased 1.1%. In contrast, the index for final demand services less trade, transportation, and warehousing advanced 0.3%.

Product detail: A major factor in the February decrease in prices for final demand services was margins for machinery and vehicle wholesaling, which fell 3.9%. The indexes for chemicals and allied products wholesaling, automobiles and automobile parts retailing, guestroom rental, and airline passenger services also declined. Conversely, prices for outpatient care (partial) rose 0.5%. The indexes for food and alcohol retailing; securities brokerage, dealing, investment advice, and related services; and loan services (partial) also increased.

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The not-seasonally adjusted price indexes we track were mixed 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 purposes of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.