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Economy in Brief

U.S. Total CPI Rise Strengthens; Core Increase Eases
by Tom Moeller  March 16, 2012

Consumer prices rose during February by the most since last April. The CPI matched expectations and increased 0.4% following a 0.2% January rise. The quicker rate of increase was due to a 3.2% gain in energy prices. Food prices ticked up a moderated 0.1%. Less both energy and food, consumer prices rose 0.1%, half the expected advance.

Energy prices rose 3.2% (7.0% y/y) as gasoline prices gained 6.0% (12.6% y/y) to the highest level since September 2008. Fuel oil costs increased a not seasonally adjusted 1.7% (7.2% y/y) but gas & electricity prices fell again by 0.8% (-1.0% y/y).

Food & beverage prices notched up 0.1% in February. The 12-month rise of 3.8% remained up sharply from 1.5% during 2010. Strength continued in prices of dairy products (7.8% y/y), meats (5.7% y/y) and cereal products (5.3% y/y). These gains were offset by a 1.9% y/y decline in fruits & vegetables. Nonalcoholic beverage prices rose 3.7% y/y.

For goods alone, less food & energy prices ticked up 0.1%. However, the 12-month increase of 2.0% was up from a 0.3% decline late in 2010. Apparel prices fell 0.9% (+4.2% y/y) and reversed the January rise. Furniture & operations costs ticked rose a quickened 0.3% and by 1.3% y/y after two years when prices fell. Motor vehicle prices increased 0.2% (2.3% y/y) following five consecutive months of decline.

The increase in core service prices eased to 0.1% (2.2% y/y) after nine months of 0.2% gain. Shelter costs (32% of the CPI) rose 0.2% (2.0% y/y). Owners equivalent rent of primary residences ticked up 0.1% (1.8% y/y). That y/y increase compares to a low of -0.3% in early 2010. Education costs rose again by 0.3% (4.4% y/y) and medical care service prices were unchanged (3.4% y/y). Public transportation prices fell 0.4% (+0.2% y/y), down for the fourth straight month. Recreation services costs slipped 0.1% (+1.0% y/y).

The chained CPI, which adjusts for shifts in consumption patterns, rose another 0.4% last month (2.6% y/y). Chained prices less food & energy rose 0.3% and by 2.0% 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 (%) Feb Jan Dec Feb Y/Y 2011 2010 2009
Total 0.4 0.2 0.0 2.9 3.1 1.6 -0.3
Total less Food & Energy 0.1 0.2 0.1 2.2 1.7 1.0 1.7
   Goods less Food & Energy 0.1 0.2 -0.1 2.0 1.3 1.1 1.3
   Services less Energy 0.1 0.2 0.2 2.2 1.8 0.9 1.9
 Food & Beverages 0.1 0.2 0.2 3.8 3.6 0.8 1.9
 Energy 3.2 0.2 -1.3 7.0 15.2 9.6 -18.2
Chained CPI: Total (NSA) 0.4 0.4 -0.2 2.6 2.8 1.4 -0.5
 Total less Food & Energy 0.3 0.2 -0.0 2.0 1.5 0.7 1.5
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