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Economy in Brief

CPI Up 0.6% Due To Energy & Services
by Tom Moeller May 17, 2006

The April consumer price index (CPI-U) rose 0.6%, the most for any month since a 0.7% rise in January and matched Consensus expectations. For the second month, however, a 0.3% rise in prices less food & energy was firmer than expected.

An 8.8% m/m jump in gasoline prices (21.5% y/y) caused energy prices to spike 3.9% and in May gas prices have moved another 6.7% higher to an average $2.93 per gallon. Fuel oil prices also were strong last month and posted a 4.0% (18.6% y/y) gain while natural gas & electricity prices fell 1.5% (+14.1% y/y) for the fourth decline in the last five months.

A 0.3% increase last month in core services prices provided additional lift to last month's rise in the "core" CPI. That reflected a 0.3% (2.9% y/y) rise in shelter prices as well as a 0.5% (6.0% y/y) gain in education expenses. Medical care services prices rose 0.3% (4.1% y/y), the smallest rise in three months and public transportation prices increased for the first month in the last three, by 0.2% (4.8% y/y).

Prices for core goods rose just 0.1% (0.4% y/y), further suggesting that the pass-through of higher energy prices has been limited. Apparel prices did jump 0.6% (-0.2% y/y) following a 1.0% March spike but window & floor coverings prices fell 1.6% (-4.5% y/y) and household appliance prices rose a modest 0.1% (1.3% y/y). New & used motor vehicle prices also rose a slim 0.1% (0.3% y/y) and tobacco prices fell 0.2% +4.2% y/y). Medical care commodity prices rose 0.4% (4.3% y/y).

Food prices were unchanged, an increase held back by a 0.7% (-0.5% y/y) decline in dairy products and another 0.1% decline (+2.6% y/y) drop in fruits & vegetables prices. Meat, fish & poultry prices rose 0.2% (0.5% y/y).

The chained CPI, which adjusts for shifts in the mix of consumer purchases, increased 0.6% and less food & energy prices rose 0.3%, half the prior month's gain.

Gas-Price Inflation from the Federal Reserve Bank of St. Louis can be found here.

Consumer Price Index April Mar Y/Y 2005 2004 2003
Total  0.6% 0.4% 3.6% 3.4% 2.7% 2.3%
 Total less Food & Energy 0.3% 0.3% 2.3% 2.2% 1.8% 1.5%
  Goods less Food & Energy 0.1% 0.3% 0.4% 0.5% -0.9% -2.0%
  Services less Energy 0.3% 0.3% 3.0% 2.8% 2.8% 2.9%
 Energy 3.9% 1.3% 17.9% 16.9% 10.8% 12.2%
 Food 0.0% 0.1% 1.8% 2.4% 3.4% 2.1%
             
Chained CPI: Total (NSA) 0.6% 0.5% 3.1% 2.9% 2.5% 2.0%
 Total less Food & Energy 0.3% 0.6% 2.1% 1.9% 1.7% 1.1%
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