March 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 0.1% in March (+0.3% expected). The index for shelter was by far the largest contributor to the monthly all-items increase. This more than offset a decline in the energy index, which decreased 3.5% over the month as all major energy component indexes declined. The food index was unchanged in March with the food at home index falling 0.3%.

The index for all items less food and energy rose 0.4% in March, after rising 0.5% in February. Indexes which increased in March include shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. The index for medical care and the index for used cars and trucks were among those that decreased over the month.

The all-items index increased 5.0% for the 12 months ending March; this was the smallest 12-month increase since the period ending May 2021. The index for all items less food and energy rose 5.6% over the last 12 months. The energy index decreased 6.4% for the 12 months ending March, and the food index increased 8.5% over the last year.

Producer Price Index

The Producer Price Index for Final Demand (PPI-FD) declined 0.5% in March (+0.0% expected). Final demand prices were unchanged in February and increased 0.4% in January. On an unadjusted basis, the index for final demand advanced 2.7% for the 12 months ended in March.

In March, two-thirds of the decline in the index for final demand can be attributed to a 1.0% decrease in prices for final demand goods. The index for final demand services moved down 0.3%.

Prices for final demand less foods, energy, and trade services edged up 0.1% in March after rising 0.2% in February. For the 12 months ended in March, the index for final demand less foods, energy, and trade services increased 3.6%.

Final Demand

Final demand goods: Prices for final demand goods decreased 1.0% in March after falling 0.3% in February. The March decline is attributable to the index for final demand energy, which dropped 6.4%. In contrast, prices for final demand goods less foods and energy and for final demand foods advanced 0.3% and 0.6%, respectively.

Product detail: Eighty percent of the March decline in the index for final demand goods can be traced to an 11.7% drop in prices for gasoline. The indexes for diesel fuel, residential natural gas, jet fuel, electric power, and fresh and dry vegetables also fell. Conversely, prices for light motor trucks increased 0.7%. The indexes for chicken eggs and for meats also moved higher.

Final demand services: Prices for final demand services moved down 0.3% in March, the largest decline since falling 0.5% in April 2020. Leading the March decrease, margins for final demand trade services dropped 0.9%. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand transportation and warehousing services fell 1.3%. In contrast, prices for final demand services less trade, transportation, and warehousing edged up 0.1%.

Product detail: A 7.3% drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final demand services. The indexes for truck transportation of freight, portfolio management, fuels and lubricants retailing, loan services (partial), and automobiles and automobile parts retailing also moved down. Conversely, prices for guestroom rental rose 4.6%. The indexes for food retailing and for transportation of passengers (partial) also advanced.

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The not-seasonally adjusted price indexes we track were either unchanged or fell on a MoM basis; they were mixed on a 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.