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.