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Economy in Brief

U.S. CPI Rise of 0.3% As-expected, 0.2% Core Also In Line
by Tom Moeller November 15, 2007

The consumer price index (CPI-U) rose an expected 0.3% last month and matched the prior month's swift increase. Rising to 3.5%, the y/y rise also was the quickest in just over one year.

Core consumer price inflation held stable at an expected 0.2% for the sixth month in the last seven. The y/y increase of 2.1% also was stable although the change over the last three months dipped to 2.1% (AR) from 2.5% where it has been since July.

Core goods prices dipped just slightly for the third straight month as apparel prices showed no change (-1.2% y/y). New & used motor vehicle prices also fell for the second straight month (-1.1% y/y) and prices of household furnishings & operation fell for the sixth month in the last seven (-0.9% y/y).Tobacco prices provided lift to the core goods price measure with a 0.2% (7.6% y/y) rise.

Core services prices rose 0.2% (3.2% y/y) but the gains have been decelerating since June, mostly because of slower gains in shelter prices. They rose 0.1% (3.3% y/y) but the three month change fell to 2.4%, half the rate of increase a year ago. The owners equivalent rent of primary residence, a measure not equivalent to other house price measures, rose 0.2% (2.8% y/y). Over the last three months, however, most of the deceleration in shelter prices has been due to prices for lodging away from home. Public transportation prices rose an accelerated 1.2% (2.6% y/y) while medical care services prices also rose an accelerated 0.6% (5.9% y/y). Education service prices rose 0.8% (5.3% y/y) but communication prices fell slightly (-0.4% y/y).

Food & beverage prices again increased 0.3% (4.4% y/y). That y/y increase is double the rate of last December. Prices for fruits & vegetable rose 0.7% (0.8% y/y) but prices for meats, poultry & fish rose 0.2% (5.6% y/y). Prices of dairy products rose a diminished 0.2% (2.8% y/y) after four straight months of double digit gain.

Energy prices were firm last month. The 1.4% gain was led by a 1.3% (5.0% y/y) rise in natural gas & electricity prices. Gasoline prices also jumped 1.4% (2.4% y/y) but the weekly data indicates a 9.2% m/m gain for November.

The chained CPI, which adjusts for shifts in the mix of consumer purchases rose 0.2% (3.0% y/y) but the core measure rose 0.2%, 1.8% y/y.

What's Really Happening in Housing Markets from the Federal Reserve Bank of Cleveland is available here.

Consumer Price Index Oct Sept Aug Y/Y  2006 2005 2004
Total  0.3% 0.3% -0.1% 3.5%  3.2% 3.4% 2.7%
Total less Food & Energy 0.2% 0.2% 0.2% 2.1%  2.5% 2.2% 1.8%
Goods less Food & Energy -0.0% -0.0% -0.0% -0.6%  0.2% 0.5% -0.9%
  Services less Energy 0.2% 0.3% 0.2% 3.2%  3.4% 2.8% 2.8%
Energy 1.4% 0.3% -3.2% 14.5%  11.1% 16.9% 10.8%
Food & Beverages 0.3% 0.5% 0.4% 4.4%  2.3% 2.4% 3.4%
            
Chained CPI: Total (NSA)  0.2% 0.3% -0.1% 3.0% 2.8% 2.9% 2.5%
 Total less Food & Energy  0.3% 0.3% 0.2% 1.8% 2.3% 1.9% 1.7%
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