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Building Material Prices drop in October | Bedford Corners Real Estate

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for October. Inflation in prices received by producers (prior to sales to consumers) declined 0.4% in October following a 0.5% decline in September and no change in August. The decline was the combination of a 0.3% decline in prices for services and a 0.4% decline in prices for goods. In contrast to prior months, energy prices were flat. The decline in the overall index was dominated by declines in services and core goods prices (excluding food and energy).

Despite flat energy prices October’s decline puts overall producer prices on track for a negative fourth quarter, a discouraging development for policy makers at the Federal Reserve who are poised to raise interest rates but have been counting on a firming of inflation before they start (FOMC).

Among wood products, softwood lumber prices ticked up in October after recent monthly declines, but the trend over the last year remains modestly downward. Slowing exports, particularly to China is keeping more supply closer to home and putting downward pressure on prices.

OSB prices ticked down in October. Monthly volatility may be masking the beginning of some recovery in prices from the recent collapse. Prices are up modestly from a low in May.

Gypsum prices added to September gains giving weight to announced price increases. Major gypsum producers have informed customers that prices will be rising through the end of this year and next (gypsum).