Recent Updates

  • UK: CPI, RPI, PPI (Jun)
  • Japan: Visitor Arrivals (Jun - Prelim)
  • Euro area: Investment Fund Statistics (May)
  • Austria: CPI (Jun)
  • Turkey: Retail Sales (May)
  • Germany: Manufacturing Orders Backlog (May)
  • Tajikistan: Monetary Aggregates, Monetary Survey (Jun); Moldova: PPI (Jun); Hungary: Foreign Currency Liquidity (Jun); Poland: IP (Jun-Prelim), PPI (Jun)
  • more updates...

Economy in Brief

CPI Fell 0.5%, Core Rose an Expected 0.2%
by Tom Moeller October 18, 2006

The consumer price index (CPI-U) fell 0.5% last month due to sharply lower energy prices. The decline outpaced expectations for a 0.3% drop and was the largest m/m decline since last November. The 0.2% rise in prices less food & energy was the third in a row and was as expected.

Energy prices were led 7.2% lower in September by a 13.5% drop in gasoline and a 4.9% (+0.5% y/y) fall in fuel oil prices. Gasoline prices have since fallen another 11.3% so far in October (-16.6% y/y) to an average $2.27 per gallon. Natural gas & electricity prices in September rose 1.2% (5.8% y/y).

Core goods prices fell 0.1% though apparel prices were strong and posted a 0.6% (0.9% y/y) gain after rising 0.9% in August. Appliance prices also rose a firm 0.7% (1.3% y/y) but furniture & bedding prices fell 0.7% (+1.4% y/y) while other equipment & furnishings prices dropped 1.9% (-6.5% y/y). New & used motor vehicle prices also slipped 0.3% (-0.1% y/y) and tobacco prices fell 0.1% (+2.1% y/y). Medical care commodity prices rose 0.2% (3.8% y/y).

Core services prices rose 0.3% as shelter prices rose 0.3% (4.2% y/y). The rental equivalence measure of owners' primary residences rose 0.3% (4.0% y/y) for the second month and rents rose 0.4% (3.9% y/y) for the fourth straight month. Public transportation costs fell 0.7% (+3.9% y/y), the first m/m decline since March. Education costs rose 0.2% (6.1% y/y) and medical care services prices rose 0.4% (4.4% y/y) for the second month.

Food & beverage prices rose 0.4% as meat, fish & poultry prices increased 0.5% (1.6% y/y) and fruit & vegetable prices surged another 3.0% (7.3% y/y). Dairy prices were unchanged (-1.0% y/y).

The chained CPI, which adjusts for shifts in the mix of consumer purchases, fell 0.3% but less food & energy prices rose 0.3%.

The Quantity Theory of Money from the Federal Reserve Bank of St. Louis can be found here.

Consumer Price Index September August Y/Y 2005 2004 2003
Total  -0.5% 0.2% 2.1% 3.4% 2.7% 2.3%
 Total less Food & Energy 0.2% 0.2% 2.9% 2.2% 1.8% 1.5%
  Goods less Food & Energy -0.1% 0.2% 0.5% 0.5% -0.9% -2.0%
  Services less Energy 0.3% 0.2% 3.9% 2.8% 2.8% 2.9%
 Energy -7.2% 0.3% -4.5% 16.9% 10.8% 12.2%
 Food & Beverages 0.4% 0.3% 2.6% 2.4% 3.4% 2.1%
             
Chained CPI: Total (NSA) -0.3% 0.3% 2.2% 2.9% 2.5% 2.0%
 Total less Food & Energy 0.3% 0.3% 2.7% 1.9% 1.7% 1.1%
close
large image