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Economy in Brief

U.S. CPI Total and Core Strengthen
by Tom Moeller  November 14, 2018

The Consumer Price Index rose 0.3% during October (2.5% y/y), the strongest increase in nine months. The increase matched expectations in the Action Economics Forecast Survey. The CPI, excluding food & energy, improved an expected 0.2% (2.1% y/y) following two months of 0.1% gain.

A 2.4% rise (8.9% y/y) in energy prices led the CPI higher, paced by a 3.7% rise (26.2% y/y) in fuel oil prices. Gasoline prices increased 3.0% (16.1% y/y) to the highest average price (all grades) since November 2014. Electricity costs strengthened 2.3% (0.7% y/y), but natural gas prices eased 0.6% (-2.1% y/y).

Nonenergy services prices increased 0.2% (2.9% y/y) for the third consecutive month. The owners' equivalent rent of primary residence gained 0.3% (3.3% y/y) while rents of primary residences rose a weakened 0.2% (3.6% y/y). Hotel costs declined 2.1% (-2.4% y/y). The cost of transportation services inched 0.1% higher (3.8% y/y) as motor vehicle insurance prices rose 0.5% (6.7% y/y). The cost of public transportation declined 0.1% (-0.5% y/y). Recreation services costs held steady (1.9% y/y). Health care costs increased 0.2% (1.9% y/y) as they did in September.

Goods prices excluding food & energy rose 0.3% (-0.1% y/y) and followed two months of 0.3% decline. Used car & truck prices improved 2.6% (0.4% y/y) and offset a 0.2% decline (+0.5% y/y) in new vehicle prices. Appliance prices jumped 1.6% (4.9% y/y) and have been strengthening since early this year. Household furnishings costs increased 0.4% (0.7% y/y) after declining moderately in each of the last five years. Apparel prices rose 0.1% (-0.4% y/y). These gains were offset by education and communications goods prices which declined 1.5% (-3.3% y/y) after a 0.2% gain. Medical care product prices eased 0.1% (+0.7% y/y) while recreation goods costs eased 0.5% (-3.5% y/y).

Food prices slipped 0.1% (+1.2% y/y) following three months of little change. Fruit & vegetable prices weakened 0.7% (-0.4% y/y), the third straight month of decline. Cereal & bakery product prices fell 0.6% (+0.5% y/y) and reversed the September increase. Dairy & related product costs fell 0.4% (-0.2% y/y), down for the third month in the last four. Meat, poultry & fish prices held steady (-0.4% y/y) while egg prices rose 0.3% (+2.8% y/y) after five straight months of decline. Nonalcoholic beverage prices gained 0.2% (0.9% y/y).

The gain in consumer prices caused real average hourly earnings to slip 0.1% (+0.7% y/y), the first decline since February.

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) Oct Sep Aug Oct Y/Y 2017 2016 2015
Total 0.3 0.1 0.2 2.5 2.1 1.3 0.1
Total less Food & Energy 0.2 0.1 0.1 2.1 1.8 2.2 1.8
  Goods less Food & Energy 0.3 -0.3 -0.3 -0.1 -0.7 -0.5 -0.5
  Services less Energy 0.2 0.2 0.2 2.9 2.7 3.1 2.6
 Food -0.1 0.0 0.1 1.2 0.9 0.3 1.9
 Energy 2.4 -0.5 1.9 8.9 7.9 -6.6 -16.7
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