By Manuel Gutierrez, Consulting Economist to NKBA
According to the U.S. Bureau of Labor Statistics, producer prices reversed direction in February, falling 0.5 percent in the month and partly offsetting the 0.7 percent increase in January. February’s drop followed the pattern of monthly declines in the second half of last year. This offers some hopeful signs in the fight against inflation. Compared to a year earlier, prices were just 2.4 percent higher — a significant improvement from the middle of last year, when producer prices were rising at more than 22 percent annually.
- The commodities with the largest price increases last month were Wood windows, up 4 percent for the month, followed by Brick and tile with an increase of 3.4 percent and Metals with an increase of 1.2 percent. On an annual basis, Wood windows saw the fourth largest increase with February prices 18 percent higher than in the previous year. Brick and tile prices were also higher year-over-year by 8.6 percent — but prices for Metals were down 4.9 percent.
- Among products for home use, Home electronic equipment saw the largest price increase in February, rising 0.8 percent from the previous month. Year over year, prices were 6 percent higher.
- Other home products with higher producer prices in February were Furniture and household durables and Domestic water heaters, each up 0.4 percent. But prices for two other home products, Domestic water systems and Window shades, remained unchanged in February. However, Window shades saw the largest price increase year-over-year at 25 percent.
- Producer prices of Household appliances went up by a barely perceptible 0.1 percent — though they were 7.4 percent higher than a year earlier.
- Going against the rising trend, prices for home heating oil fell 5.4 percent in February. Still, they were 6 percent higher year-over-year, due to the significant price increases in oil and oil products in 2022.
- Prices for Construction products overall were 14 percent higher than a year earlier. Lumber prices, which were creating havoc two years ago in new home construction by rising nearly 120 percent in a year, fell 36 percent year-over-year in February. Month over month, prices were 1.1 percent lower — the ninth monthly drop in a year.
