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The
seasonally adjusted
Consumer
Price Index for All Urban Consumers (CPI-U) declined 0.7% in January
(about in line with
expectations
of -0.6%). The energy index fell 9.7% as the gasoline index fell 18.7% in January, the sharpest in a series of seven consecutive declines. The
gasoline decrease was overwhelmingly the cause of the decline in the all items
index, which would have risen 0.1% had the gasoline index been
unchanged. The fuel oil index also fell sharply, and the index for natural gas
turned down, although the electricity index rose. The food index was unchanged
in January, with the food at home index falling for the first time since May
2013.
The
index for all items less food and energy rose 0.2% in January. The
shelter index rose 0.3%, and the indexes for personal care, for apparel,
and for recreation increased as well. The medical care index was unchanged,
while an array of indexes declined in January, including those for household
furnishings and operations, alcoholic beverages, new vehicles, used cars and
trucks, airline fares, and tobacco.
The
all items index declined 0.1% over the last 12 months, the first
negative 12-month change since the period ending October 2009. The energy index
fell 19.6% over the span, with the gasoline index down 35.4%. The
food index rose 3.2% (thanks, in part, to
ground beef
increasing by 21%), and the index for all items less food and energy increased
1.6%.
The
seasonally adjusted
Producer
Price Index for final demand (PPI) decreased 0.8% in January (versus
expectations
of -0.5%). Final demand prices moved down 0.2% in both December and
November. In January, the 0.8% decline in final demand prices can be
traced primarily to a 2.1% decrease in the index for final demand goods.
Prices for final demand services fell 0.2%.
Final
demand goods: The index for final demand
goods moved down 2.1% in January, the seventh consecutive decrease. Prices
for final demand energy fell 10.3% -- led by the index for gasoline,
which dropped 24.0%. Prices for diesel fuel, jet fuel, basic organic
chemicals, dairy products, and home heating oil also moved lower. Conversely,
the index for residential electric power moved up 1.2%. The indexes for
final demand foods and for final demand goods less foods and energy moved down
1.1% and 0.2%, respectively.
Final
demand services: The index for final
demand services decreased 0.2% in January, the first decline since
falling 0.3% in September 2014. In January, prices for final demand
services less trade, transportation, and warehousing moved down 0.4%,
and the index for final demand transportation and warehousing services dropped
0.8%. In contrast, margins for final demand trade services advanced 0.5%. (Trade indexes measure changes in margins received by wholesalers and
retailers.)
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The
price indexes we track were mixed on both month-over-month and year-over-year bases
in January. The Wood Fiber index hit a new all-time high, however.
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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.
