A closer look into the Bureau of Labor Statistics (BLS) September Producer Price Index (PPI) reveals that prices paid for goods used in residential construction increased 1.8% (not seasonally adjusted). Less food and energy the index for inputs to residential construction increased 2.2% over the month. Since declining -0.6% in April, the core index for building materials has increased 4.0% and year-to date is up 4.4%. A 28.6% increase in prices paid for softwood lumber (seasonally adjusted) led the overall index higher and is the fourth consecutive double-digit percentage increase, month-over-month. Over the last five months, the PPI for softwood lumber has nearly doubled (+90.9%). In comparison, the biggest monthly increase during the price run of 2018 was only 5.4%, less than half of the smallest increase since June 2020.
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Producer Price Index News Release summary