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Economy in Brief

U.S. CPI Is Unchanged; Core Prices Increase Steadily
by Tom Moeller  December 12, 2018

The Consumer Price Index held steady during November (2.2% y/y) following a 0.3% October rise. The result matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy improved an expected 0.2% (2.2% y/y) for a second month.

The rise in the "core" CPI reflected the fourth consecutive 0.2% increase in services prices. The gain was paced by a 0.5% increase (2.3% y/y) in recreation services costs which followed stability in October. A 0.4% rise (2.4% y/y) in medical care services prices came after two months of 0.2% gain. A 0.3% increase (3.2% y/y) in shelter prices reflected a 0.4% strengthening (3.6% y/y) in rents of primary residences which followed two months of 0.3% increase. The owners' equivalent rent of primary residences rose 0.3% (3.3% y/y) for a second straight month. Hotel costs improved 0.2% (-1.5% y/y). Education & communication costs declined 0.4% (+0.6% y/y), dragged down by a 1.6% decline (-2.1% y/y) in telephone service charges. Tuition other school fees rose 0.3% (2.7% y/y). Working 0.3% lower (-0.9% y/y) was the cost of public transportation.

Goods prices less food & energy improved 0.2% as used car & truck prices jumped 2.4% (2.3% y/y) after a 2.6% increase. Also firm were medical care product prices as they increased 0.4% (0.6% y/y) after four straight months of decline. New vehicle prices were roughly unchanged (0.3% y/y) after two months of decline. Recreation goods prices also held steady (-3.0% y/y) while video & audio equipment costs fell 0.8% (-12.1% y/y). Apparel prices also declined by 0.9% (-0.4% y/y) after a 0.1% uptick.

Food prices increased 0.2% (1.4% y/y) as cereal & bakery product prices strengthened 0.6% (1.3% y/y) and made up October's decline. Meat, poultry & fish prices rose 0.4% (0.2% y/y) while egg prices declined 0.8% (3.6% y/y). Dairy product prices eased 0.2% (-0.5% y/y) while the cost of fruits & vegetables held steady (-0.1% y/y). Nonalchoholic beverage prices declined  0.4% (+1.0 y/y).

Energy product prices declined 2.2% as gasoline prices dropped 4.2% (+5.0% y/y) and reversed the October increase. Fuel oil prices also weakened by 2.9% (+16.1% y/y) after a 3.7% rise. The price of electricity rose 0.3% (0.6% y/y) following a 2.3% jump and natural gas prices improved 0.3% (-2.1% y/y).

The gain in consumer prices caused real average hourly earnings to rise 0.3% (0.8% y/y) and recover the decline during October.

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.

Labor Market Not Overly Tight, Demographically Adjusted Measure Shows from the Federal Reserve Bank of Dallas can be found here.

Consumer Price Index, All Urban Consumers (% chg) Nov Oct Sep Nov Y/Y 2017 2016 2015
Total 0.0 0.3 0.1 2.2 2.1 1.3 0.1
Total less Food & Energy 0.2 0.2 0.1 2.2 1.8 2.2 1.8
  Goods less Food & Energy 0.2 0.3 -0.3 0.2 -0.7 -0.5 -0.5
  Services less Energy 0.2 0.2 0.2 2.9 2.7 3.1 2.6
 Food 0.2 -0.1 0.0 1.4 0.9 0.3 1.9
 Energy -2.2 2.4 -0.5 3.1 7.9 -6.6 -16.7
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