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Economy in Brief

CPI Boosted by Energy & Services
by Tom Moeller April 20, 2005

Consumer Prices (CPI-U) rose 0.6% in March versus Consensus expectations for a 0.5% rise.Prices less food & energy rose 0.4%, double expectations for a 0.2% increase.

Energy prices doubled the prior month's increase with a 4.0% gain fueled by a 7.9% (16.8% y/y) jump in gasoline prices. In April gasoline prices have moved higher to an average $2.25 per gallon versus $2.08 in March although in the latest week prices backed off the high of $2.28. Fuel oil prices rose 4.6% (28.2% y/y) but natural gas & electricity prices fell 0.3% (+6.4% y/y).

Services price inflation firmed further last month. Less energy, the 0.5% gain in March was the strongest since November 2001. Shelter prices doubled the prior month's increase with a 0.6% (3.0% y/y) rise and medical care services prices again popped 0.6% (5.0% y/y). Public transportation prices surged 1.3% (0.2% y/y) following three months of flat-to-down movement and school tuition firmed further with a 0.6% (6.4% y/y) rise.

Core goods price inflation again was tame owing to a 0.4% (+0.9%) decline in new vehicle prices, a 0.7% decline (NSA, -15.2% y/y) in computer prices, no change in furniture prices (0.3% y/y) and no change in medical care commodities (2.2% y/y). Apparel prices, however, firmed and rose 0.8% (0.0% y/y).

Food prices rose 0.2%s. Fruit & vegetable prices declined for the fourth straight month (+1.6% y/y) and meat, poultry & fish prices rose 0.2% (2.7% y/y).

The chained CPI which adjusts for shifts in the mix of consumer purchases jumped 0.7%. Core chain prices rose 0.5%.

Has the Bond Market Forgotten Oil? from the Federal Reserve Bank of St. Louis can be found here.

Consumer Price Index Mar Feb Y/Y 2004 2003 2002
Total  0.6% 0.4% 3.2% 2.7% 2.3% 1.6%
 Total less Food & Energy 0.4% 0.3% 2.4% 1.8% 1.5% 2.3%
  Goods less Food & Energy 0.0% 0.0% 0.6% -0.9% -2.0% -1.1%
  Services less Energy 0.5% 0.3% 3.0% 2.8% 2.9% 3.8%
 Energy 4.0% 2.0% 12.3% 10.9% 12.2% -5.9%
 Food 0.2% 0.1% 2.6% 3.4% 2.1% 1.8%
             
Chained CPI: Total (NSA) 0.7% 0.5% 2.6% 2.3% 2.0% 1.3%
 Total less Food & Energy 0.5% 0.6% 1.9% 1.5% 1.1% 1.9%
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