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Economy in Brief

U.S. Consumer Price Inflation Held Back By Lower Energy Prices
by Tom Moeller  February 21, 2013

During January, the consumer price index was unchanged (1.6% y/y) for the second consecutive month. Expectations were for a 0.1% uptick. However, elsewhere there was newfound strength in pricing power. Prices excluding food and energy rose 0.3% (1.9% y/y), the strongest increase since May 2011. It compared with consensus expectations for a 0.2% rise. 

Energy prices continued downward by 1.7% (-1.0% y/y) in January. The decline was led by a 3.0% drop (-1.5% y/y) in gasoline prices (which have moved back up this month). Higher electricity prices offset the gas price decline with a 1.1% jump (0.5% y/y) while fuel oil prices rose 0.7% (-1.9% y/y). Food prices were unchanged (1.6% y/y). That reflected no change (1.2% y/y) in prices of meats, poultry, fish and eggs but a 0.3% increase (2.9% y/y) in fresh fruit & vegetables. Cereal prices fell 0.5% (-1.2% y/y).

Core services prices led an improvement in pricing power elsewhere with a 0.3% gain (2.5% y/y). A 0.8% rise (3.6% y/y) in public transportation costs led the advance. Higher tuition costs followed with a 0.6% rise (3.9% y/y). Transportation services, including vehicle insurance and maintenance, increased 0.5% (3.0% y/y). Recreation service prices rose 0.3% (2.1% y/y) while medical care service prices gained 0.2% (3.6% y/y). Shelter costs (32% of the CPI) increased 0.2% (2.2% y/y). Owners equivalent rent of primary residences gained 0.2% (2.1% y/y). 

Goods price inflation less food and energy improved. The 0.2% January rise (0.4% y/y) followed six consecutive months of zero or negative change. Apparel prices led the gain with a 0.8% rise (2.1% y/y). That was followed by educational book prices which rose 0.7% (7.1% y/y). Appliance prices gained 0.4% (0.7% y/y) but furniture & bedding prices fell 0.6% (down 0.6% y/y). Recreational goods prices increased 0.3% (-1.9% y/y) while new vehicle prices ticked up 0.1% (0.5% y/y). Information technology product prices fell 0.5% (-7.6% 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(%) Jan Dec Nov Jan Y/Y 2012 2011 2010
Total 0.0 0.0 -0.2 1.6 2.1 3.1 1.6
Total less Food & Energy 0.3 0.1 0.1 1.9 2.1 1.7 1.0
  Goods less Food & Energy 0.2 -0.1 -0.1 0.4 1.3 1.3 1.1
  Services less Energy 0.3 0.2 0.2 2.5 2.4 1.8 0.9
 Food 0.0 0.2 0.2 1.6 2.6 3.7 0.8
 Energy -1.7 -0.8 -3.4 -1.0 1.0 15.2 9.6
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