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Economy in Brief

U.S. CPI Is Unchanged While Core Increase Is Stable
by Tom Moeller  July 17, 2012

Consumer prices were unchanged last month, as expected. The figure left the y/y increase at 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 fourth straight month. Nevertheless, the y/y gain of 2.2% was near its highest since September 2008.

Energy prices fell 1.4% (-3.9% y/y) as gasoline prices fell another 2.0% (-4.3% y/y). Fuel oil costs fell a not seasonally adjusted 7.9% (-6.8% y/y). Electricity prices dropped 0.5% (+0.5% y/y) but natural gas prices rose 1.7% (-13.6% y/y). Food prices inched up 0.2% (2.7% y/y) as meat costs increased 0.2% (3.3% y/y) and fruits & vegetable prices gained 1.3% (1.1% y/y). Elsewhere, cereals & bakery products costs fell 0.4% (+2.6% y/y) and dairy product prices declined 0.3% (+1.5% y/y), off for the fifth month this year.

For goods alone, prices less food & energy rose 0.2% for the fifth month this year. The 12-month increase fell further to 1.4%, its least since May of last year. Apparel prices rose a firm 0.5%. The 3.9% y/y gain was off its high but remained well above the 0.5% decline in 2010. Furniture & bedding costs slipped 0.1% (+0.6% y/y) while appliance prices increased 0.3% (3.2% y/y) following two months of decline. New motor vehicle prices increased 0.2% but by a greatly-lessened 0.9% y/y.

The 0.2% increase (2.5% y/y) in core service prices reflected a minimal 0.1% rise (2.2% y/y) in shelter costs (32% of the CPI). Owners equivalent rent of primary residences again ticked up 0.1% (2.0% y/y). The y/y increase compares to a low of -0.3% in early 2010. Education costs rose 0.3% (4.2% y/y) while medical care service prices rose a faster 0.7% (4.3% y/y). Public transportation prices declined 1.8% (+1.6% y/y) and recreation services prices increased a firm 0.6% (3.3% 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 (%) Jun May Apr Jun Y/Y 2011 2010 2009
Total 0.0 -0.3 0.0 1.7 3.1 1.6 -0.3
Total less Food & Energy 0.2 0.2 0.2 2.2 1.7 1.0 1.7
  Goods less Food & Energy 0.2 0.2 0.2 1.4 1.3 1.1 1.3
  Services less Energy 0.2 0.2 0.3 2.5 1.8 0.9 1.9
 Food 0.2 0.0 0.2 2.7 3.7 0.8 1.8
 Energy -1.4 -4.3 -1.7 -3.9 15.2 9.6 -18.2
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