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Economy in Brief

Consumer Prices Tame, As Expected
by Tom Moeller December 17, 2004

Consumer Prices (CPI-U) were tame last month, rose just 0.2% following the 0.6% spurt in October and were in line with Consensus expectations for a 0.2% rise. Prices less food & energy also were in line with a 0.2% gain that matched the prior months increase.

Services prices less energy rose the same modest 0.2% as in October. Shelter prices rose .05% (2.7% y/y), the weakest for any month in over a year. The rental equivalence price measure was unchanged m/m (2.3% y/y) and prices for lodging away from home fell (+6.1% y/y). Health care services rose 0.3% (5.0% y/y) but tuition & child care costs jumped 0.6% (6.8% y/y). Public transportation prices were strong for the second consecutive month and rose 2.4% (0.3% y/y).

"Core" commodities price inflation eased to 0.1% from the 0.4% strength of October. Household furnishings & operation prices fell (+0.7% y/y) as did prices for used cars & trucks (+3.6% y/y). New motor vehicle prices rose 0.7% (0.3% y/y) and apparel prices ticked 0.1% higher (-0.2% y/y).

Gasoline prices fell 1.8% (+31.0% y/y) but fuel oil prices were strong for seventh consecutive month, up 3.5% (38.3% y/y). Natural gas prices rebounded 2.4% (+6.8% y/y) after two months of decline.

The chained CPI, which adjusts for shifts in the mix of consumer purchases, was unchanged. Similar to the PCE price deflator, core chain prices also were unchanged.

"Are Home Prices the Next Bubble?" from the Federal Reserve Bank of New York can be found here.

Consumer Price Index Nov Oct Y/Y 2003 2002 2001
Total  0.2% 0.6% 3.6% 2.3% 1.6% 2.8%
 Total less Food & Energy 0.2% 0.2% 2.2% 1.5% 2.3% 2.7%
  Goods less Food & Energy 0.1% 0.4% 0.5% -2.0% -1.1% 0.3%
  Services less Energy 0.2% 0.2% 2.9% 2.9% 3.8% 3.7%
 Energy 0.2% 4.2% 19.0% 12.2% -5.8% 3.7%
 Food 0.2% 0.6% 3.2% 2.1% 1.8% 3.1%
             
Chained CPI: Total (NSA) 0.0% 0.5% 3.1% 1.9% 1.3% 2.3%
 Total less Food & Energy 0.0% 0.4% 1.9% 1.1% 1.9%  2.0%
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