August 2023 Consumer and Producer Price Indices (incl. Forest Products)

Click image for larger version

Consumer Price Index

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6% in August (+0.6% expected). The index for gasoline was the largest contributor to the monthly all-items increase, accounting for over half of the increase. Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month. The energy index rose 5.6% in August as all the major energy component indexes increased. The food index increased 0.2% in August, as it did in July. The index for food at home increased 0.2% over the month while the index for food away from home rose 0.3% in August.

The index for all items less food and energy rose 0.3% in August, following a 0.2% increase in July. Indexes which increased in August include rent, owners' equivalent rent, motor vehicle insurance, medical care, and personal care. The indexes for lodging away from home, used cars and trucks, and recreation were among those that decreased over the month.

The all-items index increased 3.7% for the 12 months ending August, a larger increase than the 3.2% increase for the 12 months ending in July. The index for all items less food and energy rose 4.3% over the last 12 months. The energy index decreased 3.6% for the 12 months ending August, and the food index increased 4.3% over the last year.

Producer Price Index

The Producer Price Index for final demand (PPI-FD) increased 0.7% in August (+0.4% expected). The August advance is the largest increase in final demand prices since moving up 0.9% in June 2022. On an unadjusted basis, the index for final demand rose 1.6% for the 12 months ended in August.

In August, 80% of the rise in final demand prices is attributable to a 2.0% jump in the index for final demand goods. Prices for final demand services advanced 0.2%.

The index for final demand less foods, energy, and trade services increased 0.3% in August, the same as in July. For the 12 months ended in August, prices for final demand less foods, energy, and trade services rose 3.0%, the largest advance since moving up 3.4% for the 12 months ended in April.

Final Demand

Final demand goods: The index for final demand goods jumped 2.0% in August, the largest advance since increasing 2.1% in June 2022. The August rise is mostly attributable to prices for final demand energy, which surged 10.5%. The index for final demand goods less foods and energy edged up 0.1%. In contrast, prices for final demand foods declined 0.5%.

Product detail: Over 60% of the August rise in the index for final demand goods can be traced to prices for gasoline, which jumped 20.0%. The indexes for diesel fuel, jet fuel, home heating oil, beverages and beverage materials, and iron and steel scrap also moved higher. Conversely, prices for fresh and dry vegetables fell 11.5%. The indexes for residential electric power and for industrial chemicals also decreased.

Final demand services: The index for final demand services rose 0.2% in August after increasing 0.5% in July. Leading the advance in August, prices for final demand services less trade, transportation, and warehousing moved up 0.3%. The index for final demand transportation and warehousing services jumped 1.4%. 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 1.1% increase in the index for residential real estate services (partial) was a major factor in the August rise in prices for final demand services. The indexes for truck transportation of freight; machinery, equipment, parts, and supplies wholesaling; automotive fuels and lubricants retailing; services related to securities brokerage and dealing (partial); and residential real estate loans (partial) also moved higher. Conversely, margins for chemicals and allied products wholesaling fell 4.7%. The indexes for food wholesaling and for deposit services (partial) also decreased.

Click image for larger version

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

Click image for larger version

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.