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Economy in Brief

U.S. CPI Increase Restrained By Lower Energy Prices; Core Heats Up
by Tom Moeller  May 22, 2015

The consumer price index notched 0.1% higher during April (-0.2% y/y) following unrevised 0.2% increases in the prior two months. A 0.3% gain in the core price index (1.8% y/y), however, was the largest rise since January 2013. It lifted the three-month rise to 2.6%, its strongest since August 2011. Expectations had been for a 0.1% overall CPI increase and a 0.2% core price rise according to the Action Economics Forecast Survey.

Core service price inflation strengthened last month. The 0.3% increase (2.5% y/y) was bolstered by a 0.9% rise (2.6% y/y) in medical care costs, the largest gain since 1990. Tuition, other school fees and child care costs rose 0.5% (3.7% y/y) while recreation prices improved 0.3% (1.7% y/y). Shelter prices rose 0.3% (3.0% y/y) for the third month in the last four. Owners' equivalent rents of primary residence also increased 0.3% (2.8% y/y) as did rents (3.5% y/y). Public transportation costs offset some of these gains with a 0.7% (-4.7% y/y) decrease.

Goods prices other than food & energy ticked 0.1% higher (-0.2% y/y) following two months of greater strength. Household furnishings & supplies prices increased 0.5% (-0.9% y/y) but apparel costs fell 0.3% (-0.8% y/y). New vehicle prices gained 0.1% (0.8% y/y) while used vehicles jumped 0.6% (-0.5% y/y). Educational books & supplies costs rose 0.3% (6.1% y/y) as medical care goods prices improved 0.1% (4.1% y/y). Recreation goods prices fell 0.2% (-3.1% y/y).

Food prices were fairly stable m/m (+2.0% y/y). Egg prices declined 3.0% (+2.2% y/y) while meat prices were off 0.7% (+4.8% y/y). Cereal & bakery product prices fell 0.3% (+0.9% y/y) but fruit & vegetable prices gained 0.2% (-1.5% y/y). Nonalcoholic beverage prices strengthened 0.5% (1.8% y/y).

Energy prices declined 1.3% (-19.4% y/y) as gasoline prices were off 1.7% (-31.7% y/y) following two months of improvement. Fuel oil costs declined 8.4% (-29.1% y/y) and natural gas prices fell 2.6% (-16.3% y/y). Electricity prices remained unchanged (+3.8% y/y).

The consumer price data is available in Haver's USECON database while detailed figures can be found in CPIDATA. The expectations figure is from Action Economics and is found in the AS1REPNA database.

The Outlook for the Economy is the title of today's speech by Fed Chair Janet L. Yellen and it can be found here.

Consumer Price Index (%) Apr Mar Feb Apr Y/Y 2014 2013 2012
Total 0.1 0.2 0.2 -0.2 1.6 1.5 2.1
Total less Food & Energy 0.3 0.2 0.2 1.8 1.7 1.8 2.1
  Goods less Food & Energy 0.1 0.3 0.2 -0.2 -0.3 -0.0 1.3
  Services less Energy 0.3 0.2 0.1 2.5 2.5 2.4 2.4
 Food -0.0 -0.2 0.2 2.0 2.4 1.4 2.6
 Energy -1.3 1.1 1.0 -19.4 -0.3 -0.7 0.9
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