By Manuel Gutierrez, Consulting Economist to NKBA
Price inflation for manufactured goods and services, which feeds consumer inflation down the line, bounced up by 0.8 percent in January, breaking a streak of six straight months of declines. Even though producer prices rose for the month, annual inflation dropped to 5.5 percent from the rate of 6.9 percent registered in December.
- While higher than the 1.6 percent annual average maintained between 2010 and 2019, it is much lower than the 21 percent average seen in the first half of 2022.
- January prices were up for most product categories, led by Domestic Water Systems, up 4 percent for the month and 9 percent from January 2022.
- Inflation for all residential goods and services rose 0.8 percent in January, and is 1 percent higher YOY. Household appliances were up a negligible 0.1 percent for the month, but are still 8.2 percent higher annually.
- Monthly producer prices were flat for several housing categories, including wood windows, floor coverings and domestic water heaters.
- Lumber showed the best January improvement, with inflation down 3 percent from December. Annually, lumber prices are 34 percent lower — a far cry from mid-2021, when prices were rising at a yearly rate of nearly 120 percent.
- Home heating oil reported the fourth highest price increase in January, up 2.8 percent from December, and the highest annual inflation rate, at 26 percent YOY.
