Inflation at the Producer Level in October – Wood Products Soften, Gypsum Rises

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for October. Inflation in prices received by producers (prior to sales to consumers) increased 0.2% in October after a 0.1% decline in September and no change in August. Over the 12 months ending in October prices were up 1.5%. The October increase was fueled by prices for services but partially offset by prices for goods. Energy prices declined for the fourth straight month while food prices increased.

Softwood lumber prices fell 3.1% for the month but have remained in a relatively narrow range in 2014. OSB prices slipped 2.9% in October bringing prices 12.5% below year ago levels. Forecasts for both lumber and OSB prices are relatively flat through most of 2015.

Gypsum prices bounced back in October rising 1.1% after small declines in August and September. Gypsum prices are below the all-time high set in February but above the housing boom peak set in July 2006.

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