The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for October. Inflation in prices received by producers declined 0.4 per cent in October following a 0.5 per cent decline in September and no change in August. The decline was the combination of a 0.3 per cent decline in prices for services and a 0.4 per cent decline in prices for goods. In contrast to prior months, energy prices were flat. The decline in the overall index was dominated by declines in services and core goods prices (excluding food and energy).
Despite flat energy prices October’s decline puts overall producer prices on track for a negative 4Q.
Among wood products, softwood lumber prices ticked up in October after recent monthly declines, but the trend over the last year remains modestly downward. Slowing exports, particularly to China is keeping more supply closer to home and putting downward pressure on prices.
Producer Price Index, US: October 2015
OSB prices ticked down in October. Monthly volatility may be masking the beginning of some recovery in prices from the recent collapse. Prices are up modestly from a low in May.
Gypsum prices added to September gains giving weight to announced price increases. Major gypsum producers have informed customers that prices will be rising through the end of this year and next (gypsum).