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Economy in Brief

U.S. Consumer Price Inflation Remains Subdued
by Tom Moeller  September 17, 2013

Consumer prices posted a minimal increase last month. The August consumer price index rise of just 0.1% (1.5% y/y) followed an unrevised 0.2% gain during July. A 0.2% increase had been expected according to the Action Economics Survey. Prices excluding food and energy also gained a minimal 0.1% (1.8% y/y) and contrasted with expectations for a 0.2% rise.

A 0.3% decline (-0.1% y/y) in energy prices accounted for much of the slower monthly CPI increase. The pullback was led by a 2.3% decline (+4.8% y/y) in natural gas prices. In addition, gasoline prices slipped 0.1% (-2.4% y/y) following two months of strong increase. To the upside, fuel oil prices gained  1.2%, about as in July, but they were unchanged y/y. Food price inflation remained minimal as another 0.1% increase left the y/y gain steady at 1.4%. Fruit & vegetable prices jumped 1.2% (3.6% y/y) while meat prices gained 0.6% (2.2% y/y). These increases were offset by a 0.4% decline (+0.7% y/y) in processed fruit & vegetable costs and a 0.1% dip (-1.0% y/y) in beverage prices.

Prices for goods less food and energy were roughly unchanged m/m and y/y. Appliance prices dropped 0.6% (-2.5% y/y) while furniture costs fell 0.2% (-1.2% y/y). Recreational product prices were off 0.3% (-1.6% y/y) but new vehicle prices remained unchanged (1.1% y/y). Apparel prices ticked 0.1% higher (1.8% y/y) while medical care product costs gained 0.4% (-0.0% y/y), for the second straight month.

Core services prices increased 0.2% (2.4% y/y) for the fourth consecutive month. The increase was driven by a 0.7% rise (3.1% y/y) in medical care costs. Shelter costs (32% of the CPI) gained 0.2% (2.4% y/y) while owners equivalent rent of primary residences rose 0.3% (2.2% y/y). Recreational service prices increased 0.2% (1.6% y/y) but public transportation prices fell 2.0% (+1.9% y/y), down for the third straight month.

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 (%) Aug Jul Jun Aug Y/Y 2012 2011 2010
Total 0.1 0.2 0.5 1.5 2.1 3.1 1.6
Total less Food & Energy 0.1 0.2 0.2 1.8 2.1 1.7 1.0
  Goods less Food & Energy -0.0 0.0 0.2 0.0 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 0.1 0.2 1.4 2.6 3.7 0.8
 Energy -0.3 0.2 3.4 -0.1 0.9 15.2 9.6
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