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Economy in Brief

U.S. CPI Led Lower By Energy Prices; Core Is Stable
by Tom Moeller  June 14, 2012

Consumer prices fell 0.3% last month versus an expected 0.2% decline. The figure pulled the y/y increase to 1.7%, down from its peak of 3.9% last September. Prices less food and energy increased a steady and expected 0.2%, for the third straight month. The y/y gain held at 2.3%, its highest since September 2008.

Energy prices fell 4.3% (-3.9% y/y) as gasoline prices were off 6.8% (-4.0% y/y). Fuel oil costs fell a not seasonally adjusted 2.8% (-1.1% y/y) while gas & electricity prices fell 0.7% (-3.6% y/y). Food prices were unchanged (2.8% y/y) as meat costs fell 0.3% (+2.8% y/y). Elsewhere, cereals & bakery products costs slipped 0.1% (+3.7% y/y) but fruits & vegetable prices increased 0.4% (-0.4% y/y.

For goods alone, prices less food & energy rose 0.2% for the fourth month in the last five. However, the 12-month increase fell to 1.6%. Apparel prices again rose 0.4% and the 4.4% y/y gain compared to a 0.5% decline in 2010. Furniture & bedding costs rose 0.2% (1.4% y/y) while appliance costs fell 0.6% (+3.0% y/y) for the second straight month. New motor vehicle prices increased 0.2% and by a much-lessened 1.3% y/y.

The 0.2% increase in core service prices (2.5% y/y) reflected a stable 0.2% rise (2.3% y/y) in shelter costs (32% of the CPI). Owners equivalent rent of primary residences ticked up 0.1% (2.1% y/y). The y/y increase compares to a low of -0.3% in early 2010. Education costs rose an increased 0.4% (4.2% y/y) as medical care service prices rose a quickened 0.5% (3.9% y/y). Public transportation prices rose a firm 0.8% (2.4% y/y) while recreation services prices gained 0.2% (2.6% 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 from Action Economics and is found in the AS1REPNA database.

Consumer Price Index (%) May Apr Mar May Y/Y 2011 2010 2009
Total -0.3 0.0 0.3 1.7 3.1 1.6 -0.3
Total less Food & Energy 0.2 0.2 0.2 2.3 1.7 1.0 1.7
  Goods less Food & Energy 0.2 0.2 0.2 1.6 1.3 1.1 1.3
  Services less Energy 0.2 0.3 0.2 2.5 1.8 0.9 1.9
 Food 0.0 0.2 0.2 2.8 3.7 0.8 1.8
 Energy -4.3 -1.7 0.9 -3.9 15.2 9.6 -18.2
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