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Economy in Brief

CPI Falls 0.1% in July; "Core" Also Weak
by Carol Stone August 17, 2004

The Consumer Price Index (CPI-U) fell 0.1% in July versus Consensus expectations for a 0.1-0.2% rise. As last month, the surprise was fueled by energy prices, which dropped 1.9% after July's 2.6% surge.

Seasonally adjusted gasoline prices fell back 4.2%, carrying them also below their May level, though still well higher than any previous period.

Core consumer prices again rose less than expected, at 0.1% versus a 0.2% forecast. A variety of prices fell outright, including household furnishings and operations, -0.3%, apparel, a sizable 0.8%, and recreation, -0.2%; medical commodities were off just slightly.

In the other direction, health care services and education tuition and fees continued their long-standing uptrends; school books and supplies, however, edged down 0.1%.

The chained CPI, which adjusts for shifts in the mix of consumer purchases, edged down 0.1%. It is similar to the PCE price deflator. The core chain price measure was again unchanged; it has not risen since April.

Consumer Price Index July June Y/Y 2003 2002 2001
Total  -0.1% 0.3% 3.0% 2.3% 1.6% 2.8%
 Total less Food & Energy 0.1% 0.1% 1.8% 1.5% 2.3% 2.7%
  Goods less Food & Energy -0.3% 0.0% -1.2% -2.0% -1.1% 0.3%
  Services less Energy 0.3% 0.2% 3.0% 2.9% 3.8% 3.7%
 Energy -1.9% 2.6% 14.3% 12.2% -5.8% 3.7%
 Food 0.3% 0.2% 4.0% 2.1% 1.8% 3.1%
             
Chained CPI: Total (NSA) -0.1% 0.3% 2.4% 1.9% 1.3% 2.3%
 Total less Food & Energy 0.0% 0.0% 1.3% 1.1% 1.9%  2.0%
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