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Economy in Brief

Consumer Prices Strong
by Tom Moeller November 17, 2004

The Consumer Price Index (CPI-U) jumped 0.6% last month, the strongest increase since May. The gain easily beat Consensus forecasts for a 0.4% rise. The 0.2% gain in prices less food and energy just beat the Consensus forecast for a 0.1% rise.

Gasoline prices jumped 8.6% (26.6% y/y) last month but so far in November have not risen further. Fuel oil prices also were strong and surged 8.1% (35.0% y/y). Natural gas prices fell for the second month (+3.1% y/y).

"Core" commodities prices again rose and the 0.4% gain was driven by a 1.0% (0.8% y/y) rise in household furnishings & operation. New motor vehicle prices also increased for the first month in four, up 0.4% (-0.5% y/y) and apparel prices rose 0.2% (-0.7% y/y) .

The increase in services prices less energy eased a bit to 0.2% as the gain in shelter prices fell to just 0.1% (2.8% y/y). Health care services rose 0.4% (5.1% y/y) and tuition & child care costs rose 0.4% (6.8% y/y). Public transportation prices rose 1.4% (-2.3% y/y) after two months of decline.

The chained CPI, which adjusts for shifts in the mix of consumer purchases rose 0.5%. Similar to the PCE price deflator, core chain prices rose 0.4% for the second consecutive month.

"Labor Markets, Energy Prices, and the Outlook for 2005" from Michael H. Moskow, President & CEO
of the Federal Reserve Bank of Chicago are available here.

Consumer Price Index Oct Sept Y/Y 2003 2002 2001
Total  0.6% 0.2% 3.2% 2.3% 1.6% 2.8%
 Total less Food & Energy 0.2% 0.3% 2.0% 1.5% 2.3% 2.7%
  Goods less Food & Energy 0.4% 0.2% 0.1% -2.0% -1.1% 0.3%
  Services less Energy 0.2% 0.3% 2.8% 2.9% 3.8% 3.7%
 Energy 4.2% -0.4% 15.2% 12.2% -5.8% 3.7%
 Food 0.6% 0.0% 3.5% 2.1% 1.8% 3.1%
             
Chained CPI: Total (NSA) 0.5% 0.3% 2.7% 1.9% 1.3% 2.3%
 Total less Food & Energy 0.4% 0.4% 1.7% 1.1% 1.9%  2.0%
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