Producer Prices in January – Energy Down (again), Services Flat


The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for February. Inflation in prices received by producers (prior to sales to consumers) fell 0.2% in February based on declining energy prices. Prices for services were unchanged while prices for goods declined 0.6%. Excluding food and energy, prices for goods rose 0.1%.

Softwood lumber prices trended down modestly from mid-2014 to mid-2015, but have wobbled up and down with no discernable trend since. Lumber availability is high with rising domestic production and a strong dollar drawing in imports and crimping exports. OSB prices slipped further in February adding to January’s decline. Prices are down 4.5% since December.

Gypsum prices ticked down in February after rising in January. Early year increases followed by modest declines have been the norm for the last several years. We expect prices to hover in this range in 2016.

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