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.