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.