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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Thursday, July 13, 2023

June 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 0.2% in June (+0.3% expected), after increasing 0.1% in May. The index for shelter was the largest contributor to the monthly all-items increase, accounting for over 70% of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.1% in June after increasing 0.2% the previous month. The index for food at home was unchanged over the month while the index for food away from home rose 0.4% in June. The energy index rose 0.6% in June as the major energy component indexes were mixed.

The index for all items less food and energy rose 0.2% in June, the smallest 1-month increase in that index since August 2021. Indexes which increased in June include shelter, motor vehicle insurance, apparel, recreation, and personal care. The indexes for airline fares, communication, used cars and trucks, and household furnishings and operations were among those that decreased over the month.

The all-items index increased 3.0% for the 12 months ending June; this was the smallest 12-month increase since the period ending March 2021. The index for all items less food and energy rose 4.8% over the last 12 months. The energy index decreased 16.7% for the 12 months ending June, and the food index increased 5.7% over the last year.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.1% in June (+0.2% expected). Final demand prices declined 0.4% in May and edged up 0.1% in April. On an unadjusted basis, the index for final demand advanced 0.1% for the 12 months ended in June.

In June, the increase in final demand prices can be traced to a 0.2% rise in the index for final demand services. Prices for final demand goods were unchanged.

The index for final demand less foods, energy, and trade services moved up 0.1% in June after no change in May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services advanced 2.6%.

Final Demand

Final demand services: The index for final demand services increased 0.2% in June, the same as in May. Leading the June advance, prices for final demand services less trade, transportation, and warehousing moved up 0.3%. Margins for final demand trade services rose 0.2%. (Trade indexes measure changes in margins received by wholesalers and retailers.) In contrast, the index for final demand transportation and warehousing services decreased 0.9%.

Product detail: A 5.4% advance in the index for deposit services (partial) was a major factor in the June increase in prices for final demand services. The indexes for food and alcohol retailing, traveler accommodation services, insurance, hospital inpatient care, and airline passenger services also moved higher. Conversely, prices for truck transportation of freight declined 2.1%. The indexes for food and alcohol wholesaling and for residential real estate loans (partial) also fell.

Final demand goods: Prices for final demand goods were unchanged in June after decreasing 1.6% in May. In June, a 0.7% rise in the index for final demand energy offset falling prices for final demand goods less foods and energy and for final demand foods, which declined 0.2% and 0.1%, respectively.

Product detail: Within the index for final demand goods in June, prices for gasoline rose 3.4%. The indexes for electric power; beef and veal; chicken eggs; and medical, surgical, and personal aid devices also moved higher. In contrast, prices for iron and steel scrap dropped 10.8%. The indexes for diesel fuel, oilseeds, industrial chemicals, and residual fuels also decreased.

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

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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.

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