By Manuel Gutierrez, Consulting Economist to NKBA

Inflation at the manufacturer level has increased 21 percent during the past 12 months, more than double the 8.6 percent gain for consumer prices during the same timeframe.

• Producer price increases are led by Home Heating Oil, which is a stunning 117 percent higher than last year. Fuel prices overall are substantially higher, up by 56 percent.
• Prices for Construction products are up 18 percent, a significant acceleration over the 5 percent price increase the previous year.
• Inflation for products used to build new homes has increased a more modest 12.7 percent year-over-year. 
• Among products used within the home, Window Shades lead with a 27 percent price increases over last year, followed by Domestic Water Heaters, with a 21 percent gain.
• Other household goods with appreciable inflation are Appliances, up 15 percent, and Household Furniture, up 13 percent. Floor Covering prices increased only 2 percent.
• Lumber price inflation is among the positive stories.  In May of 2021, composite lumber prices were 120 percent higher vs 2020. Since then, prices have fallen 14 percent.  Softwood lumber prices have dropped even more, currently 22 percent below a year ago.

“Lumber prices, which had been up by 120 percent YOY a year ago, have dropped by 14 percent since.”