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 In July, the US Producer Price Index increases 0.3%; softwood lumber surges 8.6%
[Aug 11, 2023]

The U.S. Bureau of Labor Statistics has released its latest report on the Producer Price Index (PPI) for final demand, revealing a 0.3% increase in July. This comes after a period of stagnant prices in June and a 0.3% decline in May.

Breaking down the data, the rise in final demand prices was primarily driven by a 0.5% increase in the index for final demand services. Meanwhile, prices for final demand goods experienced a more modest uptick of 0.1%.

Of particular note is the index for final demand for foods, energy, and trade services, which saw a notable 0.2% increase in July. This marks the largest rise since February's 0.3% increase. Over the course of 12 months ending in July, prices for final demand in this category advanced by 2.7%.

Taking a closer look at the segments, final demand services exhibited a significant 0.5% increase in July. This substantial rise is reminiscent of the last notable upswing observed in August 2022. Key drivers of this increase included a 0.7% rise in margins for final demand trade services and a 0.5% increase in the index for final demand transportation and warehousing services.

For final demand goods, prices saw a modest 0.1% increase in July, following no change in June. The rise was led by a 0.5% increase in the index for final demand foods, while prices for final demand goods excluding foods and energy remained unchanged.

After a decline of 17.3% in the last 12-month period, the softwood lumber showed an impressive 8.6% increase.

In contrast, hardwood lumber has traced a slightly different trajectory. A persistent drop of 17.5% in the unadjusted 12-month percentage change has cast a shadow over this segment, reflecting ongoing challenges. However, the most recent data indicates a 1.1% decrease in the seasonally adjusted 1-month change.

The millwork has charted a relatively stable course. With a decline of 4.5% in the last 12-month and a marginal -0.1% change from June to July.

The unadjusted 12-month PPI for plywood recorded a decrease of 15.1%. In July, PPI declined 0.4%.

While the paper segment witnessed a modest increase of 2.2% during the last 12 months, the seasonally adjusted 1-month data introduced a minor setback with a -0.2% change. Conversely, paperboard declined by 4.5% in the last 12 months. The seasonally adjusted 1-month data revealed a 1.0% decline.

Paper boxes and containers, a critical component of packaging and logistics, registered a modest increase of 1.2% in the 12-month period. From June to July, PPI for this segment demonstrated a slight decline of 0.3%.