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Economy in Brief

U.S. CPI Total Rose An Expected 0.3%
by Tom Moeller April 16, 2008

During March, the consumer price index (CPI-U) rose an expected 0.3% after having been unchanged in February. Less food & energy, consumer prices rose 0.2% and that also was as expected. A Comparison of Measures of Core Inflation from the Federal Reserve Bank of New York can be found here.

Energy prices were quite firm last month and they rose 1.9% overall, the strongest increase since last November. Fuel oil prices led the strength with a 7.9% (40.2% y/y) rise while natural gas & electricity prices also were strong. They rose 1.9% (4.1% y/y). Gasoline prices increased 1.3% (26.0% y/y) and in April already have increased another 3.6%.

Inflation of food & beverage prices remained moderate at 0.2% due to continued softness in prices for meats poultry & fish which were unchanged m/m (3.7% y/y). That followed a slight decline in February. Conversely, prices for cereal & bakery products remained strong and rose 1.3% (8.1% y/y). Earlier strength in dairy products took a breather m/m and they fell 0.8% (+11.0% y/y).

Core goods prices posted the second consecutive 0.1% m/m decline. Apparel prices fell 1.3% (-1.3% y/y) but prices for household furnishings & operations rose 0.5% (-0.2% y/y). March prices for new & used motor vehicles fell 0.1% (-0.0% y/y).

Core services prices increased 0.2% as shelter prices, which constitute 33% of the total CPI, rose just 0.1% (2.9% y/y) after having been unchanged in February. Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, rose 0.2% (2.6% y/y). Medical care services prices ticked up 0.1% (4.8% y/y) for the second straight month. Tuition costs rose 0.4% and the annual rate of gain has been fairly stable at 5.5% y/y. Another source of price strength, however, has been for public transportation where prices surged 2.5% (7.5% y/y).

Stable Prices, Stable Economy: Keeping Inflation in Check Must be No. 1 Goal of Monetary Policymakers from the Federal Reserve bank of St. Louis is available here.

Consumer Price Index (%) March February January March Y/Y  2007 2006 2005
Total  0.3 0.0 0.4 4.0  2.9 3.2 3.4
Total less Food & Energy 0.2 0.0 0.3 2.4 2.3 2.5 2.2
  Goods less Food & Energy -0.1 -0.1 0.2 0.0  -0.4 0.2 0.5
    Services less Energy 0.2 0.1 0.4 3.3 3.4 3.4 2.8
  Energy 1.9 -0.5 0.7 17.0 5.6 11.0 17.0
  Food & Beverages 0.2 0.4 0.7 4.4 4.0 2.3 2.5
        
Chained CPI: Total (NSA)  0.8 0.3 0.5 3.6 2.5 2.9 2.9
 Total less Food & Energy  0.5 0.3 0.3 2.1 2.0 2.2 1.9
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