The Producer Price Index (PPI) for final demand dropped 0.2% in May, according to the U.S. Bureau of Labor Statistics. This follows a 0.5% rise in April and a slight 0.1% dip in March. On an unadjusted basis, the index for final demand rose 2.2% over the past 12 months. The May decline mainly stemmed from a 0.8% decrease in final demand goods, while prices for final demand services remained unchanged.
The softwood lumber prices fell sharply by 5.0% in May, reversing a 5.7% increase in April. Compared to a year ago, softwood lumber prices have dropped 8.1%. Hardwood lumber prices rose by 0.9% in May, following a 1.7% increase in April, and are up 1.8% compared to last year. Millwork prices dropped by 0.6%, reversing a 0.3% rise in April, and are down 0.2% from a year ago. Plywood prices declined by 0.4% in May after a 1.3% increase in April, and are up 1.9% compared to the previous year.
In the paper sector, prices for paper increased by 0.7% in May, up from a 0.6% rise in April, and have risen 0.5% over the past year. Paperboard prices saw a smaller rise of 0.3% in May, compared to a 0.5% increase in April, but are down 1.6% from a year ago. Paper boxes and containers experienced a 0.8% price increase in May, following a 0.6% rise in April, and are down 2.0% year-over-year. However, building paper and board prices decreased by 5.6% in May after a substantial 17.6% increase in April, but are still up 20.6% compared to last year.
The broader PPI for intermediate demand displayed mixed results. Prices for processed goods for intermediate demand fell by 1.5%, marking the most significant drop since October 2023, while unprocessed goods prices decreased by 1.9%. These fluctuations highlight the ongoing instability in the lumber and paper products markets, reflecting both seasonal adjustments and broader economic factors.
The sharp decline in energy prices significantly impacted the overall PPI. Energy prices dropped by 4.8% in May, with gasoline prices falling by 7.1%. Diesel fuel, chicken eggs, electric power, jet fuel, and basic organic chemicals also saw price decreases. Conversely, cigarette prices rose by 3.3%, along with increases in hay, hayseeds, and oilseeds.
