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Economy in Brief

U.S. CPI Driven By Energy & Food
by Tom Moeller   May 13, 2011

Higher energy & food prices were behind much of last month's increase in consumer prices. The Commerce Department reported  that prices rose 0.4% in April after an unrevised 0.5% March gain. The increase matched Consensus expectations. The y/y price rise of 3.2% was the strongest since October 2008. On a three-month basis prices rose at a 6.2% annual rate, also the firmest since mid-2008. Core price inflation remained moderate. The CPI less food & energy rose an expected 0.2% but the y/y increase of 1.3% was the firmest since last February. The 2.1% three-month increase in core prices was the strongest since 2009.

Energy prices again led last month with a 2.2% increase. Gasoline prices rose 3.3% (33.1% y/y) while prices for natural gas & electricity rose 0.6% (0.1% y/y). Food & beverage costs rose a firm 0.4% (3.1% y/y), the strongest increase since April 2009. The gain was raised by a 1.7% increase (6.2% y/y) in dairy prices and a 1.1% rise (7.6% y/y) in meat, poultry, fish & eggs.

For goods alone, core prices rose an accelerated 0.4% led by a 0.8% increase in motor vehicles (2.2% y/y). Apparel prices gained 0.2% (0.1% y/y) while prices for household furnishings & operation also rose 0.2% (-0.9% y/y).

Core service prices inched up just 0.1% (1.6% y/y) last month. Education costs rose 0.3% (3.8% y/y) while medical care service prices also rose 0.3% (2.8% y/y). Public transportation costs rose a lessened 0.2% (9.3% y/y). Shelter costs, which are 32% of the CPI, rose 0.1% for the seventh straight month but the y/y change improved to 1.0% due to declines early last year. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, again nudged up 0.1% while the y/y increase improved to 0.9% after no change last year. Nevertheless, the reading remained nearly the weakest since the series' start in 1983.

The chained CPI, which adjusts for shifts in consumption patterns, jumped another 0.6% and 2.9% year-to-year. Chained prices less food & energy increased 0.2% m/m and by 1.1% y/y.

The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database. The expectations figure is the AS1REPNA database.

Consumer Price Index (%) Apr Mar Feb Apr Y/Y 2010 2009 2008
Total 0.4 0.5 0.5 3.2 1.6 -0.3 3.8
Total less Food & Energy 0.2 0.1 0.2 1.3 1.0 1.7 2.3
  Goods less Food & Energy 0.4 0.1 0.2 0.7 1.1 1.3 0.1
  Services less Energy 0.1 0.2 0.2 1.6 0.9 1.9 3.1
 Energy 2.2 3.5 3.4 18.6 9.6 -18.2 13.7
 Food & Beverages 0.4 0.7 0.5 3.1 0.8 1.9 5.4
Chained CPI: Total (NSA) 0.6 0.9 0.5 2.9 1.5 -0.1 3.7
 Total less Food & Energy 0.2 0.3 0.4 1.1 0.7 1.5 2.0
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