February’s consumer and producer prices

this week saw the release of the three major monthly price indices from the Bureau of Labor Statistics: the February Consumer Price Index, the February Producer Price Index and the February Import-Export Price Index … in addition, this week also saw the Mortgage Monitor for January from Black Knight Financial Services, which indicated that 3.22% of all mortgages were delinquent in January, down from 3.40% in December and down from 3.75% in January of 2019, and that 0.46% of all mortgages were in the foreclosure process, the same percentage that were in foreclosure in December but down from the 0.51% of mortgages that were in foreclosure a year earlier…

Consumer Prices Rose 0.1% in February on Higher Prices for Food, Rent, & Clothing

The consumer price index rose 0.1% in February, as higher prices for food, shelter, and clothing were partly offset by lower prices for energy and drugs…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices rose by 0.1% in February, after rising by 0.1% in January, 0.2% in December, 0.2% in November, 0.2% in October, 0.1% in September, 0.1% in August and rising 0.3% in July…the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 257.971 in January to 258.678 in February, which left it statistically 2.3349% higher than the 252.776 index reading of February of last year, which is reported as a 2.3% year over year increase, down from 2.5% a month ago….with lower prices for energy a major drag on the overall index increase, seasonally adjusted core prices, which exclude food and energy, rose by 0.2% for the month, as the unadjusted core price index rose from 266.004 to 267.268, which left the core index 2.3568% ahead of its year ago reading of 261.114, which is reported as a 2.4% year over year increase, up from the 2.3% year over year increase that was reported for January…

The volatile seasonally adjusted energy price index fell 2.0% in February, after falling 0.7% in January, after rising 1.6% in December, 0.8% in November and by 1.7% in October, but after falling 0.8% in September, falling 1.4% in August and rising 0.9% in July, and is now still 2.8% higher than in February a year ago…the price index for energy commodities was 1.6% lower in February, while the index for energy services was 0.3% lower, after rising 0.6% in January….the energy commodity index was down 3.5% due to a 3.3% decrease in the price of gasoline, the largest component, and a 8.5% decrease in the index for fuel oil, while prices for other energy commodities, including propane, kerosene, and firewood, were on average 0.1% lower…within energy services, the price index for utility gas service fell 0.9% after rising 1.0% in January and is still 2.0% lower than it was a year ago, while the electricity price index fell 0.1% after rising 0.6% in January….energy commodities are still averaging 5.0% higher than their year ago levels, with gasoline prices averaging 5.6% higher than they were a year ago, while the energy services price index is now unchanged from last February, as electricity prices are still 0.6% higher than a year ago…

The seasonally adjusted food price index rose 0.4% February, after rising 0.2% January, 0.2% December, 0.1% in November, 0.2% October, 0.2% September, but being unchanged in June, July & August, as the price index for food purchased for use at home was 0.5% higher in December, while the index for food bought to eat away from home was 0.2% higher, as average prices at fast food outlets rose 0.3% and prices at full service restaurants rose 0.2% while food prices at employee sites and schools were on average 0.2% higher…

In the food at home categories, the price index for cereals and bakery products was 0.5% higher as average bread prices rose 0.9%, prices for fresh biscuits, rolls, muffins rose 0.9%, the index for rice, pasta, and cornmeal rose 0.7%, and the index for crackers and cracker products prices rose 2.7%…at the same time, the price index for the meats, poultry, fish, and eggs group was 0.2% higher, as ham prices rose 3.2%, egg prices rose 1.1%, and the poultry index was 0.4% higher… meanwhile, the seasonally adjusted index for dairy products was 1.1% higher, as prices for cheese & related products rose 1.1% and the index for ‘other’ dairy products rose 1.5%…however, the fruits and vegetables index was unchanged as the price index fresh fruits rose 0.1%, the price index for fresh vegetables was unchanged, and the index for canned fruits rose 0.7% while the price index for frozen fruits and vegetables fell 1.0%…at the same time, the beverages index was 0.5% higher as the price index for beverage materials including coffee and tea rose 1.1%….lastly, the index for the ‘other foods at home’ category was up 0.8, as the price index for sugar and sugar substitutes rose 0.8%, peanut butter prices rose 4.2%, the price index for snacks rose 2.5%, the index for frozen and freeze dried prepared foods rose 1.0%, and prices for baby food averaged 3.7% higher….the itemized list for price changes of over 100 separate food items is included at the beginning of Table 2 for this release, which also gives us a line item breakdown for prices of more than 200 CPI items overall…since last February, only the price of ham, which has risen 10.2% has seen a price change greater than 10% over the past year…

Among the seasonally adjusted core components of the CPI, which rose by 0.2% in February after rising by 0.2% in January, 0.1% December, 0.2% November, 0.1% October, 0.2% in September, 0.2% in August, and by 0.3% in July, the composite price index of all goods less food and energy goods was 0.2% higher in February, while the more heavily weighted composite for all services less energy services was also 0.2% higher….among the goods components, which will be used by the Bureau of Economic Analysis to adjust February’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.1% higher, as the price index for major appliances rose 4.3% and the index for living room, kitchen, and dining room furniture rose 1.9%….at the same time, the apparel price index was 0.4% higher on a 3.4% increase in the price index for men’s underwear, nightwear, swimwear, and accessories, a 4.2% increase in the price index for women’s outerwear, and a 2.6% increase in the price index for girl’s apparel… in addition, the price index for transportation commodities other than fuel was 0.2% higher as prices for new cars rose 0.4%, prices for used cars and trucks rose 0.4% and the price index for motor oil, coolant, and fluids rose 3.4%…on the other hand, prices for medical care commodities averaged 0.6% lower because prescription drugs prices fell 0.8%, non-prescription drugs prices fell 0.3% and the medical equipment price index fell 0.3%…meanwhile, the recreational commodities index was 0.1% lower despite a 4.9% increase in the price index for photographic equipment and supplies, due a 1.6% decrease in TV prices, a 1.1% decrease in the price index for sports vehicles including bicycles, a 2.4% decrease in the price index for toys, games, hobbies and playground equipment, and a 1.6% decrease in price index for newspapers and magazines…on the other hand, the education and communication commodities index was 0.6% higher on a 1.5% increase in the price index for computer peripherals, and smart home assistants and a 0.9% increase in the price index for college textbooks…lastly, a separate price index for alcoholic beverages was 0.3% higher, while the price index for ‘other goods’ was 0.6% higher on a 1.2% increase in the index for hair, dental, shaving, and miscellaneous personal care products and a 0.7% increase in cigarette prices..

Within core services, the price index for shelter rose 0.3% as rents rose 0.3%, homeowner’s equivalent rent rose 0.2%, and prices for lodging away from home at hotels and motels rose 2.3%, while at the same time the shelter sub-index for water, sewers and trash collection rose 0.3%, and other household operation costs were 0.7% higher on a 1.7% increase in the price index for gardening and lawncare services….in addition, the price index for medical care services was 0.3% higher, even as the price index for hospital services fell 0.1%, because the price of health insurance rose 1.4%…at the same time, the transportation services price index was was 0.3% higher as the price index for car and truck rental rose 0.7%, motor vehicle repair costs rose 1.6% and motor vehicle insurance rose 0.5%….on the other hand, the recreation services price index fell 0.5% as prices for cable and satellite television services fell 0.6%, veterinarian services fell 0.7% and the index for admission to sporting events fell 4.0%…meanwhile, the index for education and communication services was 0.1% higher as day care and preschool tuition rose 0.6%, postage rose 0.6%, and the price index for land-line telephone services rose 0.3%….lastly, the index  for other personal services was up 0.3% as the price index for legal services rose 0.6%, and the index for checking account and other bank services was 0.8% higher…

Among core line items, prices for televisions, which are now averaging 19.9% cheaper than a year ago, the price index for telephone hardware, calculators, and other consumer information items, which is down by 13.9% since last February, the rental of video discs and other media, which has fallen 16.2% from a year ago, the price index for boys’ apparel, which has fallen by 11.1% in the past year, and the price index for computer software and accessories, which is down 10.6% year over year, have all seen prices drop by more than 10% over the past year, while the cost of health insurance, which is now up by 20.7% over the past year, is the only line item to have increased by a double digit magnitude over that span….

Producer Prices Down 0.6% in February on Lower Food and Energy Prices, Lower Margins for Retailers

The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.6% in February, as prices for finished wholesale goods averaged 0.9% lower, while average margins of final services providers decreased by 0.3%…that follows a January report that indicated the PPI had risen 0.5%, as prices for finished wholesale goods had been on average 0.1% higher, while margins of final services providers increased by 0.7%, a December report that indicated the PPI was up 0.2%, with prices for finished wholesale goods up 0.3% while margins of final services providers were unchanged, a revised November report that shows the PPI was 0.1% lower, with prices for finished wholesale goods rising 0.3% while margins of final services providers decreased 0.2%, and a revised October report that indicated the PPI was 0.3% higher, with prices for finished wholesale goods rising 0.5% and margins of final services providers rising 0.2%….on an unadjusted basis, producer prices are now now just 1.3% higher than a year ago, down from the 2.1% year over year increase indicated by last month’s report, while, the core producer price index, which excludes food, energy and trade services, fell by just 0.1% for the month, and is now 1.4% higher than in February a year ago, down from the 1.5% year over year increase shown in January…

As noted, the price index for final demand for goods, aka ‘finished goods’, was 0.9% lower in February, after being 0.1% higher in January, 0.3% higher in December, 0.3% higher in November, 0.5% higher in October, 0.2% lower in September, 0.3% lower in August, 0.3% higher in July, 0.5% lower in June, 0.2% lower in May, 0.3% higher in April, 0.9% higher in March, and 0.3% higher in February of last year….the finished goods index fell 0.9% in February because the wholesale price index for energy goods was 3.6% lower, after falling by 0.7% in January but after rising by 1.5% in December, 0.5% in November and 1.8% in October, and because the price index for wholesale foods fell 1.6% in January after rising 0.2% in January, falling 0.3% in December and after rising 1.2% in November and 1.4% in October, and while the index for final demand for core wholesale goods (excluding food and energy) was 0.1% lower after rising 0.3% in January and 0.2% in December…wholesale energy prices were lower due to a 6.5% decrease in wholesale prices for gasoline, an 11.6% decrease in wholesale prices for home heating oil, and a 10.0% decrease in wholesale prices for diesel fuel, while the wholesale food price index fell 1.6% on a 28.9% decrease in the wholesale price index for fresh and dry vegetables, a 6.6% decrease in the wholesale price index for fish and shellfish and a 5.4% decrease in the wholesale price index for oilseeds, and despite a 33.4% increase in the wholesale price of eggs for fresh use….among wholesale core goods, wholesale prices for iron and steel scrap fell 7.1%, wholesale prices for light motor trucks fell 1.5%, the wholesale price index for women’s, girls’, and infants’ apparel fell 2.4% and the wholesale price index for industrial chemicals fell 1.7%..

At the same time, the index for final demand for services fell 0.3% in February, after rising 0.7% in January, being unchanged in December, falling by a revised 0.2% in November, and rising by a revised 0.2% in October, as the index for final demand for trade services fell 0.7%, the index for final demand for transportation and warehousing services fell 0.6%, and the core index for final demand for services less trade, transportation, and warehousing services was 0.1% higher….among trade services, seasonally adjusted margins for apparel, jewelry, footwear, and accessories retailers fell 11.7%, margins for book retailers fell 3.2%, and margins for food and alcohol wholesalers fell 1.5%, while margins for machinery, equipment, parts, and supplies wholesalers rose 1.3% … among transportation and warehousing services, margins for air transportation of freight fell 1.2% and margins for airline passenger services fell 0.9%…among the components of the core final demand for services index, margins for hospital outpatient care rose 1.0%, margins for securities brokerage, dealing, investment advice, and related services rose 3.6%, and margins for home health and hospice care rose 1.1%, while margins for arrangement of vehicle rentals and lodging fell 5.8%…

This report also showed the price index for intermediate processed goods fell 0.9% in February, after falling 0.3% in January, rising 0.1% in December, rising a revised 0.2% in November, and a revised 0.3% in October….the price index for intermediate energy goods fell 4.0%, as refinery prices for gasoline fell 6.5%, refinery prices for jet fuel fell 16.% and refinery prices for No. 2 diesel fuel fell 10%, while producer prices liquefied petroleum gas fell 11.3%…at the same time, prices for intermediate processed foods and feeds fell 0.6%, as the producer price index for meats fell 2.6% and the index for prepared animal feeds fell 1.8%…meanwhile, the core price index for intermediate processed goods less food and energy fell 0.2% as the producer price index for copper and brass mill shapes fell 3.2% and producer prices for primary nonferrous metals and for paper both decreased 2.3%… prices for intermediate processed goods are now 2.1% lower than in Febuary a year ago, the tenth consecutive year over year decrease, following 29 months of year over year increases, which had been preceded by 16 months of negative year over year comparisons, as intermediate goods prices fell every month from July 2015 through March 2016….

Meanwhile, the price index for intermediate unprocessed goods fell 7.7% in February, after falling 0.6% in January, but after rising 1.6% in December, a revised 2.8% in November, and a revised 0.3% in October….that was as the February price index for crude energy goods fell 13.6% as crude oil prices fell 16.3% and as unprocessed natural gas prices fell 15.8%, while the price index for unprocessed foodstuffs and feedstuffs fell 5.8% on a 10.2% decrease in producer prices for slaughter hogs, a 7.6% decrease in producer prices for slaughter turkeys, and a 6.0% decrease in producer prices for raw milk…at the same time, the index for core raw materials other than food and energy materials fell 1.5%, as prices for unprocessed iron and steel scrap fell 7.1%, prices for copper base scrap fell 5.2%, and prices for aluminum base scrap fell 1.9%…this raw materials index is now 8.2% lower than a year ago, as the year over year change on this index remained negative all last year…

Lastly, the price index for services for intermediate demand slipped 0.1 in February after being unchanged in January, rising 0.4 percent in December, rising a revised 0.1 percent in November, and falling a revised 0.6 percent in October…the price index for intermediate trade services was 0.4% lower, as margins for intermediate building materials, paint, and hardware wholesalers fell 1.3% and margins for food wholesalers fell 1.8%, while the index for transportation and warehousing services for intermediate demand was 0.2% lower, as the price index for water transportation of freight fell 4.0% and the price index for intermediate air mail and package delivery services, excluding by USPS, fell 1.4%…on the other hand, the core price index for intermediate services less trade, transportation, and warehousing was unchanged, as the intermediate price index for securities brokerage, dealing, investment advice, and related services rose 3.6%, the price index for radio advertising time sales rose 1.8%, and the price index for wireless telecommunication services rose 2.9%, while the price index for traveler accommodation services fell 10.0%, the price index for nonresidential real estate rents fell 3.7%, the price index for deposit services (partial) fell 1.6% and the index for “internet advertising space sales, excluding Internet ads sold by print publishers” fell 1.2%…over the 12 months ended in January, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is now 1.4% higher than it was a year ago, down from 1.7% in January and from 1.8% in December…

 

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)

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