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Economy in Brief

CPI Unchanged
by Tom Moeller December 15, 2006

In November, the consumer price index (CPI-U) remained unchanged following 0.5% declines during the prior two months. Consensus expectations had been for a 0.2% rise.

Prices less food & energy also were unchanged after the weak 0.1% October increase. Core prices were last unchanged in June of 2005 and here too Consensus expectations had been for a 0.2% increase.

Core goods prices fell 0.4%. The decline was the fourth in the last five months and was the largest since October 2003. New & used motor vehicle prices dropped 0.8% (-0.9% y/y), off for the third consecutive month, while apparel prices fell 0.3% (+0.2% y/y) for the second consecutive down month.

Household furnishings & operation prices added to the list where prices fell with a 0.2% decline (+0.9% y/y). Also in the act of decline were medical care commodity prices which fell 0.4% (+2.3% y/y) and tobacco prices which fell 0.3% (+1.6% y/y).

With a 0.2% increase, core services prices posted the weakest gain since this past August. Most of the weakness owed to a 1.9% (-0.2% y/y) decline in public transportation costs, the third consecutive monthly decline. Shelter prices rose 0.4% (4.2% y/y) as the rental equivalence measure of owners' primary residences rose 0.3% (4.3% y/y). Rents rose 0.4% (4.1% y/y) for the sixth consecutive month. Education costs rose a strong 0.5% (6.3% y/y) and medical care services prices increased 0.3% (4.0% y/y).

Energy prices fell 0.2% after two months of roughly 7.0% decline. Gasoline prices fell another 1.6% (-4.2% y/y) but have moved higher in December to an average $2.30 per gallon from $2.23 in November. Fuel oil prices last month rose 0.3% (-3.0% y/y) after two 6.1% m/m declines. Natural gas prices rose 4.7% (-19.9% y/y) but electricity prices fell 0.2% (+6.5% y/y) for the second consecutive month.

Food & beverage prices slipped 0.1%. Dairy product prices fell 0.6% (-1.6% y/y) but prices for meats, poultry, fish & eggs were unchanged (1.2% y/y).

The chained CPI, which adjusts for shifts in the mix of consumer purchases, fell 0.2 as did prices less food & energy prices.

Consumer Price Index November October Y/Y 2005 2004 2003
Total  0.0% -0.5% 2.0% 3.4% 2.7% 2.3%
 Total less Food & Energy 0.0% 0.1% 2.6% 2.2% 1.8% 1.5%
  Goods less Food & Energy -0.4% -0.3% -0.1% 0.5% -0.9% -2.0%
  Services less Energy 0.2% 0.3% 3.7% 2.8% 2.8% 2.9%
 Energy -0.2% -7.0% -3.6% 16.9% 10.8% 12.2%
 Food & Beverages -0.1% 0.3% 2.3% 2.4% 3.4% 2.1%
             
Chained CPI: Total (NSA) -0.2% -0.3% 1.9% 2.9% 2.5% 2.0%
 Total less Food & Energy -0.2% 0.3% 2.3% 1.9% 1.7% 1.1%
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