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Economy in Brief

U.S. CPI Picks Up
by Tom Moeller  February 17, 2012

Consumer prices rose during January at their quickest pace in four months. The CPI increased 0.2% after being unchanged in December. A 0.3% gain had been the Consensus expectation. Figures back to 2007 were revised due to new seasonal factors. The faster rate of increase owed last month to an expected 0.2% rise in the total less food and energy. The increase lifted the gain versus last year to 2.3%, its quickest since 2008 and up from the 2010 full-year low of 1.0%.

Food & beverage prices rose 0.2% in January. The 12-month rise of 4.4% remained up sharply from 1.5% during 2010. Strength continued in prices of dairy products (9.0% y/y), meats (7.2% y/y) and cereal products (5.3% y/y). Energy prices rose 0.2% (6.1% y/y), the first increase in four months. Gasoline prices rose 0.9% (9.7% y/y) while fuel oil prices increased a not seasonally adjusted 1.2% (9.7% y/y). Gas & electricity prices fell 0.8% and ticked up just 0.4% y/y.

Quicker price gains for goods alone were behind the faster core inflation increase. They rose a moderate 0.2% last month. However, the 12-month increase of 2.2% was up from a 0.3% decline late in 2010. Apparel prices rose 0.9% (4.7% y/y) last month. Furniture & operations costs ticked up 0.1% and by 1.0% y/y after two years of decline. Motor vehicle prices fell 0.4%, down for the fifth straight month. The 2.6% 12-month rise was up from 0.8% in 2010.

Core service price increases also accelerated. They rose 0.2% last month for the ninth straight time but the y/y gain of 2.3% was up from 0.9% in 2010. Shelter costs (32% of the CPI) rose 0.2% (2.0% y/y). Owners equivalent rent of primary residences gained 0.2% (1.8% y/y). Education costs were strong and rose 0.3% (4.4% y/y) and medical care service prices increased 0.2% (3.7% y/y). Public transportation prices fell 0.8% (+1.7% y/y), down for the third straight month. Recreation services costs rose 1.1% m/m and by an accelerated 1.7% y/y.

The chained CPI, which adjusts for shifts in consumption patterns, rebounded 0.4% last month (2.7% y/y). Chained prices less food & energy rose 0.2% and by 2.1% y/y.

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

Consumer Price Index (%) Jan Dec Nov Jan Y/Y 2011 2010 2009
Total 0.2 0.0 0.1 2.9 3.1 1.6 -0.3
Total less Food & Energy 0.2 0.1 0.2 2.3 1.7 1.0 1.7
  Goods less Food & Energy 0.2 -0.1 0.1 2.2 1.3 1.1 1.3
  Services less Energy 0.2 0.2 0.2 2.3 1.8 0.9 1.9
 Food & Beverages 0.2 0.2 0.1 4.2 3.6 0.8 1.9
 Energy 0.2 -1.3 -0.5 6.1 15.2 9.6 -18.2
Chained CPI: Total (NSA) 0.4 -0.3 -0.1 2.7 3.0 1.5 -0.1
 Total less Food & Energy 0.2 -0.0 0.0 2.1 1.4 0.7 1.5
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