Prices Paid for Goods Used in Residential Construction Climb Higher in August

An in-depth study of the latest Produce Price Index (PPI) released by the Bureau of Labor Statistics (BLS) reports that the prices paid for goods used in residential construction pushed higher again in August, increasing 0.9% (not seasonally adjusted). The increase marks the fourth consecutive monthly increase since the index decline three months straights prior and brings the index back to pre-pandemic levels. According to the BLS the four-month increase is almost exclusively due to the dramatic rise in softwood lumber prices, which in August increased 14.9%. Since April prices have increased 50%, which is the largest four-month gain in the history of the unadjusted data series, which dated back to 1949.  Year-to-date the index has decreased 1.3%, a larger decline than the prior record for a July YTD decrease (-0.9% in 2000). Prices paid for goods used in residential construction have only fallen five times between January and June since 2000. On the other hand, the price for gypsum and ready-mixed concrete declined in August, -0.2% and 0.3% respectively.