July 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 July  (+0.2% expected), the same increase as in June. The index for shelter was by far the largest contributor to the monthly all-items increase, accounting for over 90% of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.2% in July after increasing 0.1% the previous month. The index for food at home increased 0.3% over the month while the index for food away from home rose 0.2% in July. The energy index rose 0.1% in July as the major energy component indexes were mixed.

The index for all items less food and energy rose 0.2% in July, as it did in June. Indexes which increased in June include shelter, motor vehicle insurance, education, and recreation. The indexes for airline fares, used cars and trucks, medical care, and communication were among those that decreased over the month.

The all-items index increased 3.2% for the 12 months ending July, slightly more than the 3.0% increase for the 12 months ending in June. The index for all items less food and energy rose 4.7% over the last 12 months. The energy index decreased 12.5% for the 12 months ending July, and the food index increased 4.9% over the last year.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.3% in July (+0.2% expected). Final demand prices were unchanged in June and declined 0.3% in May. On an unadjusted basis, the index for final demand advanced 0.8% for the 12 months ended in July.

In July, the increase in final demand prices was led by a 0.5% rise in the index for final demand services. Prices for final demand goods edged up 0.1%.

The index for final demand less foods, energy, and trade services moved up 0.2% in July, the largest increase since a 0.3% rise in February. For the 12 months ended in July, prices for final demand less foods, energy, and trade services advanced 2.7%.

Final Demand

Final demand services: The index for final demand services increased 0.5% in July, the largest rise since moving up 0.5% in August 2022. Leading the broad-based advance in July, prices for final demand services less trade, transportation, and warehousing climbed 0.3%. Margins for final demand trade services rose 0.7%, and the index for final demand transportation and warehousing services moved up 0.5%. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Forty percent of the July advance in the index for final demand services can be traced to a 7.6% rise in prices for portfolio management. The indexes for machinery and vehicle wholesaling; outpatient care (partial); chemicals and allied products wholesaling; securities brokerage, dealing, investment advice, and related services; and transportation of passengers (partial) also moved higher. Conversely, margins for food and alcohol retailing declined 2.5%. The indexes for application software publishing and for long-distance motor carrying also fell.

Final demand goods: Prices for final demand goods edged up 0.1% in July after no change in June. The July increase is attributable to the index for final demand foods, which rose 0.5%. Prices for final demand goods less foods and energy and for final demand energy were both unchanged.

Product detail: Within the index for final demand goods in July, prices for meats rose 5.0%. The indexes for gas fuels; hay, hayseeds, and oilseeds; utility natural gas; and motor vehicles also moved higher. In contrast, prices for diesel fuel dropped 7.1%. The indexes for gasoline, fresh fruits and melons, and plastic resins and materials 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.