September 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 September (+0.3% expected). Over the last 12 months, the all-items index increased 3.7% before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all-items increase (the 41st consecutive monthly increase to the shelter index), accounting for over half of the increase. An increase in the gasoline index was also a major contributor to the all-items monthly rise. While the major energy component indexes were mixed in September, the energy index rose 1.5% over the month. The food index increased 0.2% in September, as it did in the previous two months. The index for food at home increased 0.1% over the month while the index for food away from home rose 0.4%.

The index for all items less food and energy rose 0.3% in September, the same increase as in August. Indexes which increased in September include rent, owners' equivalent rent, lodging away from home, motor vehicle insurance, recreation, personal care, and new vehicles. The indexes for used cars and trucks and for apparel were among those that decreased over the month.

The all-items index increased 3.7% for the 12 months ending September, the same increase as the 12 months ending in August. The index for all items less food and energy rose 4.1% over the last 12 months. The energy index decreased 0.5% for the 12 months ending September, and the food index increased 3.7% over the last year.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.5% in September (+0.3% expected). Final demand prices rose 0.7% in August and 0.6% in July. On an unadjusted basis, the index for final demand advanced 2.2% for the 12 months ended in September, the largest increase since moving up 2.3% for the 12 months ended in April.

Leading the increase in the final demand index in September, prices for final demand goods rose 0.9%. The index for final demand services advanced 0.3%.

Prices for final demand less foods, energy, and trade services increased 0.2% in September, the fourth consecutive advance. For the 12 months ended in September, the index for final demand less foods, energy, and trade services moved up 2.8%.

Final Demand

Final demand goods: The index for final demand goods moved up 0.9% in September, the third consecutive increase. Nearly three-quarters of the broad-based September advance is attributable to a 3.3% rise in prices for final demand energy. The indexes for final demand foods and for final demand goods less foods and energy moved up 0.9% and 0.1%, respectively.

Product detail: Over 40% of the September increase in prices for final demand goods can be traced to a 5.4% rise in the index for gasoline. Prices for jet fuel, processed young chickens, meats, electric power, and diesel fuel also advanced. In contrast, the index for fresh and dry vegetables declined 13.9%. Prices for wood pulp and for utility natural gas also fell.

Final demand services: The index for final demand services advanced 0.3% in September following a 0.2% rise in August. Over 60% of the September increase is attributable to prices for final demand services less trade, transportation, and warehousing, which climbed 0.3%. The index for final demand trade services moved up 0.5%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand transportation and warehousing services declined 0.4%.

Product detail: A 13.9% jump in the index for deposit services (partial) was a major factor in the September rise in prices for final demand services. The indexes for machinery, equipment, parts, and supplies wholesaling; health, beauty, and optical goods retailing; traveler accommodation services; outpatient care (partial); and application software publishing also moved higher. In contrast, prices for airline passenger services fell 2.1%. The indexes for automobile retailing (partial) and for bundled wired telecommunications access services also decreased.

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The not-seasonally adjusted price indexes we track were mixed on a MoM basis but all lower 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.