March 2024 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) increased 0.4% in March (+0.3% expected), the same increase as in February. Over the last 12 months, the all-items index increased 3.5% before seasonal adjustment.

The index for shelter rose in March, as did the index for gasoline. Combined, these two indexes contributed over half of the monthly increase in the index for all items. The energy index rose 1.1% over the month. The food index rose 0.1% in March. The food at home index was unchanged, while the food away from home index rose 0.3% over the month.

The index for all items less food and energy rose 0.4% in March, as it did in each of the 2 preceding months. Indexes which increased in March include shelter, motor vehicle insurance, medical care, apparel, and personal care. The indexes for used cars and trucks, recreation, and new vehicles were among those that decreased over the month.

The all-items index rose 3.5% for the 12 months ending March, a larger increase than the 3.2% increase for the 12 months ending February. The index for all items less food and energy rose 3.8% over the last 12 months. The energy index increased 2.1% for the 12 months ending March, the first 12-month increase in that index since the period ending February 2023. The food index increased 2.2% over the last year.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) rose 0.2% in March (+0.3% expected). Final demand prices moved up 0.6% in February and 0.4% in January. On an unadjusted basis, the index for final demand increased 2.1% for the 12 months ended in March, the largest advance since rising 2.3% for the 12 months ended April 2023.

The March increase in the index for final demand is attributable to a 0.3% rise in prices for final demand services. In contrast, the index for final demand goods edged down 0.1%.

The index for final demand less foods, energy, and trade services moved up 0.2% in March after rising 0.3% in February. For the 12 months ended in March, prices for final demand less foods, energy, and trade services increased 2.8%.

Final Demand

Final demand services: The index for final demand services moved up 0.3% in March, the third consecutive rise. Leading the broad-based March increase, prices for final demand services less trade, transportation, and warehousing advanced 0.2%. The indexes for final demand trade services and for final demand transportation and warehousing services moved up 0.3% and 0.8%, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A major factor in the March increase in prices for final demand services was the index for securities brokerage, dealing, investment advice, and related services, which rose 3.1%. The indexes for professional and commercial equipment wholesaling; airline passenger services; investment banking; deposit services (partial); and computer hardware, software, and supplies retailing also moved higher. Conversely, prices for traveler accommodation services decreased 3.8%. The indexes for automobiles retailing (partial) and for machinery and equipment parts and supplies wholesaling also fell.

Final demand goods: Prices for final demand goods decreased 0.1% in March after rising 1.2% in February. The decline is attributable to the index for final demand energy, which moved down 1.6%. In contrast, prices for final demand foods and for final demand goods less foods and energy advanced 0.8% and 0.1%, respectively.

Product detail: Leading the March decline in the index for final demand goods, prices for gasoline decreased 3.6%. The indexes for chicken eggs, carbon steel scrap, jet fuel, and fresh fruits and melons also fell. Conversely, prices for processed poultry jumped 10.7%. The indexes for fresh and dry vegetables, residential electric power, and motor vehicles also moved higher.

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The not-seasonally adjusted price indexes we track were all higher on a MoM basis except for intermediate materials, 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.

February 2024 International Trade (Softwood Lumber)

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With February exports of goods and services at $263.0 billion (+2.3% MoM; +4.1% YoY) and imports at $331.9 billion (+2.2% MoM; +2.8% YoY), the net trade deficit was $68.9 billion (+1.9% MoM; -1.7% YoY). 

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Softwood lumber exports rose (10 MMBF or +10.2%) in February, along with imports (99 MMBF or +8.9%). Exports were 14 MMBF (+14.3%) above year-earlier levels; imports: 127 MMBF (+11.6%) higher. As a result, the year-over-year (YoY) net export deficit was 113 MMBF (+11.4%) higher. Also, the average net export deficit for the 12 months ending February 2024 was 7.5% below the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the lumber-trade graph above).

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North America (56.9% of total softwood lumber exports -- of which Mexico: 36.7%; Canada: 20.2%), Asia (15.1% -- especially India: 3.5%; Japan: 2.2%; China: 4.0%), and the Caribbean (21.0% -- especially the Dominican Republic: 10.7%; Bahamas: 2.1%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 9.9% lower than the same month(s) of the prior year. Meanwhile, Canada was the source of most (83.4%) softwood lumber imports into the United States. Imports from Canada were 8.6% higher YTD/YTD. Overall, YTD exports were up 7.9% compared to the prior year; imports: +0.4%.

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U.S. softwood lumber export activity through the Gulf customs region represented 40.2% of the U.S. total; West Coast: 28.2%, and Eastern: 22.0%. Mobile (18.8% of the U.S. total), San Diego (14.9%) Seattle (12.0%), and Laredo (15.7%) were the most active districts. At the same time, the Great Lakes customs region handled 57.1% of softwood lumber imports -- most notably the Duluth, MN district (16.9%) -- coming into the United States. 

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Southern yellow pine comprised 30.7% of all softwood lumber exports; other pine (12.1%), Douglas-fir (12.9%), treated lumber (12.1%), and finger-jointed (9.7%) were also significant.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

February 2024 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) increased 0.4% in February (+0.4% expected), after rising 0.3% in January. Over the last 12 months, the all-items index increased 3.2% before seasonal adjustment.

The index for shelter rose in February, as did the index for gasoline. Combined, these two indexes contributed over 60% of the monthly increase in the index for all items. The energy index rose 2.3% over the month, as all of its component indexes increased. The food index was unchanged in February, as was the food at home index. The food away from home index rose 0.1% over the month.

The index for all items less food and energy rose 0.4% in February, as it did in January. Indexes which increased in February include shelter, airline fares, motor vehicle insurance, apparel, and recreation. The index for personal care and the index for household furnishings and operations were among those that decreased over the month.

The all-items index rose 3.2% for the 12 months ending February, a larger increase than the 3.1% increase for the 12 months ending January. The index for all items less food and energy rose 3.8% over the last 12 months. The energy index decreased 1.9% for the 12 months ending February, while the food index increased 2.2% over the last year.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) rose 0.6% in February (+0.4% expected). Final-demand prices increased 0.3% in January and edged down 0.1% in December 2023. On an unadjusted basis, the final-demand index advanced 1.6% for the 12 months ended in February, the largest rise since moving up 1.8% for the 12 months ended September 2023.

In February, nearly two-thirds of the rise in final-demand prices can be traced to the index for final demand goods, which advanced 1.2%. Prices for final-demand services moved up 0.3%.

The index for final demand less foods, energy, and trade services increased 0.4% in February after rising 0.6% in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services moved up 2.8%.

Final Demand

Final-demand goods: Prices for final-demand goods advanced 1.2% in February, the largest increase since moving up 1.7% in August 2023. Nearly 70% of the broad-based rise in February can be attributed to the index for final-demand energy, which jumped 4.4%. Prices for final-demand goods less foods and energy and for final-demand foods also increased, moving up 0.3% and 1.0%, respectively.

Product detail: One-third of the February advance in the index for final-demand goods can be traced to a 6.8% increase in prices for gasoline. The indexes for diesel fuel, chicken eggs, jet fuel, beef and veal, and tobacco products also rose. Conversely, prices for hay, hayseeds, and oilseeds decreased 8.3%. The indexes for iron and steel scrap and for asphalt also fell.

Final-demand services: Prices for final-demand services moved up 0.3% in February after rising 0.5% in January. Leading the February increase, the index for final-demand services less trade, transportation, and warehousing advanced 0.5%. Prices for final-demand transportation and warehousing services rose 0.9%. In contrast, margins for final-demand trade services declined 0.3%. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A quarter of the February increase in the index for final-demand services can be attributed to a 3.8% rise in prices for traveler accommodation services. The indexes for outpatient care (partial); airline passenger services; loan services (partial); securities brokerage, dealing, and investment advice; and alcohol retailing also moved up. Conversely, margins for chemicals and allied products wholesaling fell 6.4%. The indexes for automobiles and parts retailing and for services related to securities brokerage and dealing (partial) also decreased.

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The not-seasonally adjusted price indexes we track were all higher on a MoM basis except for wood fiber, and 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.

January 2024 International Trade (Softwood Lumber)

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With January exports of goods and services at $257.2 billion (+0.1% MoM; -0.4% YoY) and imports at $324.6 billion (+1.1% MoM; -1.2% YoY), the net trade deficit was $67.4 billion (+5.1% MoM; -4.1% YoY). 

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Softwood lumber exports rose (11 MMBF or +15.2%) in January, while imports fell (31 MMBF or -2.7%). Exports were 2 MMBF (+1.6%) above year-earlier levels; imports: 116 MMBF (-9.4%) lower. As a result, the year-over-year (YoY) net export deficit was 118 MMBF (-10.4%) lower. Also, the average net export deficit for the 12 months ending January 2024 was 9.0% below the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the lumber-trade graph above).

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North America (53.8% of total softwood lumber exports -- of which Mexico: 34.0%; Canada: 19.8%), Asia (16.5% -- especially India: 4.4%; Japan: 3.2%; China: 3.0%), and the Caribbean (22.4% -- especially the Dominican Republic: 10.0%; Bahamas: 2.4%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 16.9% lower than the same month(s) of the prior year. Meanwhile, Canada was the source of most (81.2%) softwood lumber imports into the United States. Imports from Canada were 2.1% higher YTD/YTD. Overall, YTD exports were up 1.6% compared to the prior year; imports: -9.4%.

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U.S. softwood lumber export activity through the Gulf customs region represented 36.2% of the U.S. total; West Coast: 32.4%, and Eastern: 23.4%. Mobile (18.7% of the U.S. total), San Diego (16.4%) Seattle (13.2%), and Laredo (11.2%) were the most active districts. At the same time, the Great Lakes customs region handled 53.4% of softwood lumber imports -- most notably the Duluth, MN district (14.4%) -- coming into the United States. 

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Southern yellow pine comprised 24.7% of all softwood lumber exports; other pine (14.0%), Douglas-fir (13.7%), treated lumber (12.5%), and finger-jointed (10.5%) were also significant.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

January 2024 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) increased 0.3% in January (+0.2% expected), after rising 0.2% in December. Over the last 12 months, the all-items index increased 3.1% before seasonal adjustment.

The index for shelter continued to rise in January, increasing 0.6% and contributing over two thirds of the monthly all-items increase. The food index increased 0.4% in January, as the food at home index increased 0.4% and the food away from home index rose 0.5% over the month. In contrast, the energy index fell 0.9% over the month due in large part to the decline in the gasoline index.

The index for all items less food and energy rose 0.4% in January. Indexes which increased in January include shelter, motor vehicle insurance, and medical care. The index for used cars and trucks and the index for apparel were among those that decreased over the month.

The all-items index rose 3.1% for the 12 months ending January, a smaller increase than the 3.4% increase for the 12 months ending December. The index for all items less food and energy rose 3.9% over the last 12 months, the same increase as for the 12 months ending December. The energy index decreased 4.6% for the 12 months ending January, while the food index increased 2.6% over the last year.

 

Producer Price Index

The Producer Price Index for final demand increased 0.3% in January (+0.1% expected). Final-demand prices declined 0.1% in December 2023 and advanced 0.1% in November. On an unadjusted basis, the index for final demand rose 0.9% for the 12 months ended January 2024.

In January, the advance in the index for final demand can be traced to a 0.6% rise in prices for final-demand services. In contrast, the index for final-demand goods decreased 0.2%.

The index for final demand less foods, energy, and trade services rose 0.6% in January 2024, the largest advance since moving up 0.6% in January 2023. For the 12 months ended January 2024, prices for final demand less foods, energy, and trade services increased 2.6%.

Final Demand

Final-demand services: The index for final-demand services moved up 0.6% in January, the largest increase since rising 0.8% in July 2023. In January, most of the advance is attributable to prices for final-demand services less trade, transportation, and warehousing, which climbed 0.8%. The index for final-demand trade services moved up 0.2%. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final-demand transportation and warehousing services fell 0.4%.

Product detail: A 2.2% increase in the index for hospital outpatient care was a major factor in the January rise in prices for final-demand services. The indexes for chemicals and allied products wholesaling, machinery and equipment wholesaling, portfolio management, traveler accommodation services, and legal services also moved higher. In contrast, prices for long-distance motor carrying decreased 1.0%. The indexes for computer hardware, software, and supplies retailing and for engineering services also moved lower.

Final-demand goods: The index for final-demand goods moved down 0.2% in January, the fourth consecutive decline. Most of the January decrease is attributable to a 1.7% drop in prices for final-demand energy. The index for final-demand foods fell 0.3%. Conversely, prices for final-demand goods less foods and energy increased 0.3%.

Product detail: Leading the January decline in the index for final-demand goods, prices for gasoline fell 3.6%. The indexes for electric power; hay, hayseeds, and oilseeds; beef and veal; ethanol; and iron and steel scrap also moved lower. In contrast, prices for communication and related equipment increased 2.4%. The indexes for soft drinks and for liquified petroleum gas also moved higher.

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The not-seasonally adjusted price indexes we track were all higher on a MoM basis and 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.

December 2023 International Trade (Softwood Lumber)

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With December exports of goods and services at $258.2 billion (+1.5% MoM; +3.2% YoY) and imports at $320.4 billion (+1.3% MoM; -0.4% YoY), the net trade deficit was $62.2 billion (+0.5% MoM; -12.9% YoY). 

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Softwood lumber exports fell (18 MMBF or -16.8%) in December, along with imports (25 MMBF or -2.1%). Exports were 7 MMBF (-7.0%) below year-earlier levels; imports: 30 MMBF (+2.7%) higher. As a result, the year-over-year (YoY) net export deficit was 37 MMBF (+3.6%) higher. Also, the average net export deficit for the 12 months ending December 2023 was 7.1% below the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the lumber-trade graph above).

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North America (55.5% of total softwood lumber exports -- of which Mexico: 36.4%; Canada: 19.1%), Asia (20.3% -- especially India: 6.1%; Japan: 3.7%; China: 3.4%), and the Caribbean (17.3% -- especially the Dominican Republic: 5.1%; Jamaica: 4.0%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 58.6% higher than the same month of the prior year. Meanwhile, Canada was the source of most (80.5%) softwood lumber imports into the United States. Imports from Canada were 6.6% lower YTD/YTD. Overall, YTD exports were down 1.8% compared to the prior year; imports: -6.6%.

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U.S. softwood lumber export activity through the Gulf customs region represented 35.4% of the U.S. total; West Coast: 31.6%, and Eastern: 23.7%. Mobile (14.0% of the U.S. total), San Diego (15.3%) Laredo (12.8%), and Seattle (12.7%) were the most active districts. At the same time, the Great Lakes customs region handled 56.5% of softwood lumber imports -- most notably the Duluth, MN district (17.4%) -- coming into the United States. 

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Southern yellow pine comprised 23.5% of all softwood lumber exports; Douglas-fir (14.9%), treated lumber (12.6%), other pine (14.4%) and finger-jointed (10.9%) were also significant.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

December 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) increased 0.3% in December on a seasonally adjusted basis (+0.2% expected), after rising 0.1% in November. Over the last 12 months, the all-items index increased 3.4% before seasonal adjustment.

The index for shelter continued to rise in December, contributing over half of the monthly all-items increase. The energy index rose 0.4% over the month as increases in the electricity index and the gasoline index more than offset a decrease in the natural gas index. The food index increased 0.2% in December, as it did in November. The index for food at home increased 0.1% over the month and the index for food away from home rose 0.3%.

The index for all items less food and energy rose 0.3% in December, the same monthly increase as in November. Indexes which increased in December include shelter, motor vehicle insurance, and medical care. The index for household furnishings and operations and the index for personal care were among those that decreased over the month.

The all-items index rose 3.4% for the 12 months ending December, a larger increase than the 3.1% increase for the 12 months ending November. The index for all items less food and energy rose 3.9% over the last 12 months, after rising 4.0% over the 12 months ending November. The energy index decreased 2.0% for the 12 months ending December, while the food index increased 2.7% over the last year.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) was unchanged in November, seasonally adjusted (+0.2% expected). Final-demand prices decreased 0.4% in October and rose 0.4% in September. On an unadjusted basis, the index for final demand increased 0.9% for the 12 months ended in November.

The Producer Price Index for final demand fell 0.1% in December, seasonally adjusted (+0.2% expected). Final-demand prices moved down 0.1% in November and 0.4% in October. On an unadjusted basis, the index for final demand rose 1.0% in 2023 after increasing 6.4% in 2022.

The December decrease in the index for final demand is attributable to a 0.4% drop in prices for final-demand goods. The index for final-demand services was unchanged.

The index for final demand less foods, energy, and trade services rose 0.2% in December after edging up 0.1% in both November and October. Prices for final demand less foods, energy, and trade services climbed 2.5% in 2023 following a 4.7% increase in 2022.

Final Demand

Final-demand goods: The index for final-demand goods fell 0.4% in December, the third consecutive decline. In December, nearly 60% of the decrease can be traced to a 1.2% drop in prices for final-demand energy. The index for final-demand foods moved down 0.9%, while prices for final-demand goods less foods and energy were unchanged.

Product detail: In December, half of the decrease in the index for final-demand goods is attributable to prices for diesel fuel, which dropped 12.4%. The indexes for jet fuel; eggs for fresh use; non-carbonated soft drinks; passenger cars; and hay, hayseeds, and oilseeds also moved lower. In contrast, prices for gasoline rose 2.1%. The indexes for carbonated soft drinks and for nonferrous scrap also increased.

Final-demand services: The index for final-demand services remained unchanged in December, the same as in both November and October. In December, prices for final-demand services less trade, transportation, and warehousing rose 0.4%. Conversely, the indexes for final-demand trade services and for final-demand transportation and warehousing services fell 0.8% and 0.4%, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final-demand services in December, prices for securities brokerage, dealing, and investment advice increased 3.3%. The indexes for consumer loans (partial), application software publishing, airline passenger services, and fuels and lubricants retailing also moved higher. In contrast, margins for machinery and vehicle wholesaling decreased 5.5%. The indexes for guestroom rental, long-distance motor carrying, automobiles and parts retailing, and apparel wholesaling also fell.

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The not-seasonally adjusted price indexes we track were mostly lower on a MoM basis and 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.

November 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) increased 0.1% in November on a seasonally adjusted basis (0.0% expected), after being unchanged in October. Over the last 12 months, the all-items index increased 3.1% before seasonal adjustment.

The index for shelter continued to rise in November, offsetting a decline in the gasoline index. The energy index fell 2.3% over the month as a 6.0-percent decline in the gasoline index more than offset increases in other energy component indexes. The food index increased 0.2% in November, after rising 0.3% in October. The index for food at home increased 0.1% over the month and the index for food away from home rose 0.4%.

The index for all items less food and energy rose 0.3% in November, after rising 0.2% in October. Indexes which increased in November include rent, owners' equivalent rent, medical care, and motor vehicle insurance. The indexes for apparel, household furnishings and operations, communication, and recreation were among those that decreased over the month.

The all-items index rose 3.1% for the 12 months ending November, a smaller increase than the 3.2-percent increase for the 12 months ending October. The index for all items less food and energy rose 4.0% over the last 12 months, as it did for the 12 months ending October. The energy index decreased 5.4% for the 12 months ending November, while the food index increased 2.9% over the last year.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) was unchanged in November, seasonally adjusted (+0.1% expected). Final-demand prices decreased 0.4% in October and rose 0.4% in September. On an unadjusted basis, the index for final demand increased 0.9% for the 12 months ended in November.

In November, the indexes for both final-demand goods and for final-demand services were unchanged.

The index for final demand less foods, energy, and trade services edged up 0.1% in November, the sixth consecutive advance. For the 12 months ended in November, prices for final demand less foods, energy, and trade services rose 2.5%.

Final Demand

Final-demand goods: The index for final-demand goods was unchanged in November after dropping 1.4% in October. In November, price increases of 0.6% for final-demand foods and 0.2% for final-demand goods less foods and energy offset a 1.2-percent decrease in the index for final-demand energy.

Product detail: Within final-demand goods in November, prices for chicken eggs jumped 58.8%. The indexes for fresh fruits and melons, utility natural gas, electric power, and carbon steel scrap also moved higher. In contrast, prices for gasoline fell 4.1%. The indexes for processed poultry, industrial chemicals, jet fuel, and liquefied petroleum gas also moved lower.

Final-demand services: The index for final-demand services remained unchanged in November, the same as in October. In November, prices for final-demand services less trade, transportation, and warehousing edged up 0.1%. Conversely, the indexes for final-demand trade services and for final-demand transportation and warehousing services declined, 0.2% and 0.5%, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final-demand services in November, prices for traveler accommodation services rose 4.0%. The indexes for deposit services (partial); health, beauty, and optical goods retailing; food and alcohol wholesaling; and apparel, footwear, and accessories retailing also advanced. In contrast, margins for automobile retailing (partial) declined 5.1%. The indexes for chemicals and allied products wholesaling, portfolio management, furniture retailing, and truck transportation of freight also fell.

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The not-seasonally adjusted price indexes we track were mostly lower on a MoM basis and 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.

October 2023 International Trade (Softwood Lumber)

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With October exports of goods and services at $258.8 billion (-1.0% MoM; +1.3% YoY) and imports at $323.0 billion (+0.2% MoM; -3.2% YoY), the net trade deficit was $64.3 billion (+5.1% MoM; -18.0% YoY). 

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Softwood lumber exports ticked up (15 MMBF or +13.9%) in October, while imports rose (76 MMBF or +6.4%). Exports were 16 MMBF (+14.5%) above year-earlier levels; imports: 45 MMBF (-3.4%) lower. As a result, the year-over-year (YoY) net export deficit was 61 MMBF (-5.0%) smaller. Also, the average net export deficit for the 12 months ending October 2023 was 7.6% below the average of the same months a year earlier (the “YoY MA(12) % Chng” series shown in the lumber-trade graph above).

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North America (55.6% of total softwood lumber exports -- of which Mexico: 39.4%; Canada: 16.2%), Asia (16.5% -- especially Japan; 2.1%; China: 6.1%), and the Caribbean (23.2% -- especially the Dominican Republic: 8.1%; Jamaica: 6.3%) were the primary destinations for U.S. softwood lumber exports. Year-to-date (YTD) exports to China were 69.5% higher than the same month of the prior year. Meanwhile, Canada was the source of most (82.8%) softwood lumber imports into the United States. Imports from Canada were 8.6% lower YTD/YTD. Overall, YTD exports were down 1.9% compared to the prior year; imports: -7.7%.

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U.S. softwood lumber export activity through the Gulf customs region represented 38.2% of the U.S. total; West Coast: 33.9%, and Eastern: 20.0%. Mobile (17.9% of the U.S. total), San Diego (19.1%) Laredo (14.5%), and Seattle (9.0%) were the most active districts. At the same time, the Great Lakes customs region handled 57.4% of softwood lumber imports -- most notably the Duluth, MN district (18.1%) -- coming into the United States. 

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Southern yellow pine comprised 24.0% of all softwood lumber exports; Douglas-fir (12.3%), treated lumber (15.5%), other pine (15.7%) and finger-jointed (11.4%) were also significant.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

October 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) was essentially unchanged in October (+0.1% expected), after increasing 0.4% in September. Over the last 12 months, the all-items index increased 3.2% before seasonal adjustment.

The index for shelter continued to rise in October, offsetting a decline in the gasoline index and resulting in the seasonally adjusted index being unchanged over the month. The energy index fell 2.5% over the month as a 5.0% decline in the gasoline index more than offset increases in other energy component indexes. The food index increased 0.3% in October, after rising 0.2% in September. The index for food at home increased 0.3% over the month while the index for food away from home rose 0.4%.

The index for all items less food and energy rose 0.2% in October, after rising 0.3% in September. Indexes which increased in October include rent, owners' equivalent rent, motor vehicle insurance, medical care, recreation, and personal care. The indexes for lodging away from home, used cars and trucks, communication, and airline fares were among those that decreased over the month.

The all-items index rose 3.2% for the 12 months ending October, a smaller increase than the 3.7% increase for the 12 months ending September. The index for all items less food and energy rose 4.0% over the last 12 months, its smallest 12-month change since the period ending in September 2021. The energy index decreased 4.5% for the 12 months ending October, and the food index increased 3.3% over the last year.

 

Producer Price Index

The Producer Price Index for final demand (PPI-FD) fell 0.5% in October (+0.1% expected), after  advancing 0.4% in September. The October decline is the largest decrease in final demand prices since a 1.2% drop in April 2020. On an unadjusted basis, the index for final demand rose 1.3% for the 12 months ended in October.

In October, the index for final demand goods fell 1.4%. Prices for final demand services were unchanged.

The index for final demand less foods, energy, and trade services advanced 0.1% in October, the fifth consecutive rise. For the 12 months ended in October, prices for final demand less foods, energy, and trade services moved up 2.9%.

Final Demand

Final demand goods: Prices for final demand goods moved down 1.4% in October, the first decrease since falling 1.5% in May. A major factor in the October decline was the index for final demand energy, which dropped 6.5%. Prices for final demand foods fell 0.2%. Conversely, the index for final demand goods less foods and energy edged up 0.1%.

Product detail: Over 80% of the October decline in the index for final demand goods is attributable to a 15.3% drop in prices for gasoline. The indexes for diesel fuel; hay, hayseeds, and oilseeds; home heating oil; liquefied petroleum gas; and light motor trucks also fell. (In accordance with usual practice, most new-model-year passenger cars and light motor trucks were introduced into the PPI in October.) In contrast, prices for tobacco products increased 2.4%. The indexes for butter and for residual fuels also moved up.

Final demand services: Prices for final demand services were unchanged in October following six consecutive advances. In October, increases of 1.5% in the index for final demand transportation and warehousing services and 0.1% in prices for final demand services less trade, transportation, and warehousing offset a 0.7% decline in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Within the index for final demand services in October, prices for airline passenger services rose 3.1%. The indexes for chemicals and allied products wholesaling, inpatient care, outpatient care (partial), and truck transportation of freight also increased. Conversely, margins for machinery and vehicle wholesaling declined 2.9%. The indexes for apparel, footwear, and accessories retailing; portfolio management; traveler accommodation services; and health, beauty, and optical goods retailing also fell.

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The not-seasonally adjusted price indexes we track were mostly lower on a MoM basis and 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.