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Economy in Brief

U.S. CPI Moderates As Energy Price Strength Cools
by Tom Moeller  August 15, 2013

Price inflation showed signs of moderating last month. The July consumer price index increased an expected 0.2% (2.0% y/y) following its 0.5% jump during June. Prices excluding food and energy also gained 0.2% (1.7% y/y) for the third straight month, as forecasted.

A lessened 0.2% rise (4.8% y/y) in energy prices was responsible for last month's slower CPI increase. That followed its 3.4% spike during June. The pullback mostly reflected a 2.8% decline (+8.8% y/y) in natural gas prices as well as a 0.3% dip (+3.1% y/y) in electricity costs. At the gas pump, there was little relief. Gasoline prices added 1.0% (5.2% y/y) to their 6.3% June jump. Also, fuel oil prices rose 1.1% (3.4% y/y after four straight months of decline.

Food price inflation moderated as the 0.1% increase (1.4% y/y) last month was half the June rise. Cereal & bakery product costs (1.1% y/y) and dairy product prices (0.7% y/y) both declined modestly. Meat prices, however, rose by 0.4% (1.2% y/y) while fruit & vegetable prices jumped 1.5% (2.7% y/y).

Prices for goods less food and energy were unchanged (-0.2% y/y) following a 0.2% June rise. Apparel prices remained firm and posted a 0.6% increase (1.6% y/y) while prices of educational books & supplies also rose 0.6% (6.3% y/y). Medical care product prices gained 0.4% (-0.1% y/y) but tobacco & smoking product costs jumped 1.4% (2.7% y/y). Working the other way, new car & truck prices remained unchanged (1.3% y/y) while recreation product prices slipped 0.2% (-1.6% y/y). Furniture & bedding costs fell 0.6% (-1.5% y/y) and home appliance prices declined 1.3% (-2.8% y/y).

Core services prices increased 0.2% (2.4% y/y) for the third straight month. Transportation services costs rose 0.4% (3.0% y/y) and recreation services prices ticked up 0.1% (1.6% y/y). Shelter costs (32% of the CPI) gained 0.2% (2.3% y/y) while owners equivalent rent of primary residences edged up 0.1% (2.2% y/y). Medical care services prices also rose 0.1% (2.6% y/y) but public transportation services prices fell 1.3% (+3.1% 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 from Action Economics and is found in the AS1REPNA database. 

Consumer Price Index (%) Jul Jun May Jul Y/Y 2012 2011 2010
Total 0.2 0.5 0.1 2.0 2.1 3.1 1.6
Total less Food & Energy 0.2 0.2 0.2 1.7 2.1 1.7 1.0
  Goods less Food & Energy 0.0 0.2 0.0 -0.2 1.3 1.3 1.1
  Services less Energy 0.2 0.2 0.2 2.4 2.4 1.8 0.9
 Food 0.1 0.2 -0.1 1.4 2.6 3.7 0.8
 Energy 0.2 3.4 0.4 4.8 0.9 15.2 9.6
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