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Economy in Brief

U.S. Consumer Price Inflation is Minimal; Food Prices Jump but Energy Prices Weaken
by Tom Moeller  March 18, 2014

Consumer prices edged 0.1% higher (1.1% y/y) during February following a like January rise. The increase matched consensus expectations in the Action Economics Forecast Survey. Consumer prices excluding food and energy also gained 0.1%, for the third consecutive month and the sixth time in the last seven months. The rise matched consensus expectations.

Food price inflation heated up last month. The 0.4% price increase (1.4% y/y) was the largest gain since September 2011. Egg prices jumped 2.2% (5.7% y/y) while meat prices surged 1.7% (3.6% y/y). Fruit & vegetable prices strengthened 1.1% (-0.4% y/y) and dairy product prices increased 0.7% (0.6 y/y). Working the other way, cereal & bakery product prices declined 0.4% (+0.5% y/y), poultry prices fell 0.3% (+2.5% y/y) and nonalcoholic beverage prices also were off 0.3% (-1.8% y/y).

Offsetting food price strength was a 0.5% decline (-2.5% y/y) in energy prices. Gasoline prices fell 1.7% (-8.1% y/y) and electricity prices slipped 0.2% (+3.8% y/y). Moving upward were fuel oil prices by 4.1% (2.9% y/y) and natural gas costs by 3.6% (8.3% y/y).

Consumer prices for goods less food and energy edged 0.1% lower (-0.4% y/y). Furniture & bedding prices fell 1.1% (-3.0% y/y) and apparel costs declined 0.3% (-0.6% y/y). Appliance prices edged down 0.2% (-3.5% y/y) but new car & truck prices ticked 0.1% higher (0.3% y/y). Recreation goods prices were unchanged (-2.1% y/y) though educational books & supplies prices increased 0.9% (3.2% y/y). Also strong were medical care commodity prices, up 0.6% (1.7% y/y).

Core services prices increased another 0.2% (2.2% y/y). Public transportation prices strengthened 0.5% (-1.8% y/y) and tuition cost also rose 0.5% (3.2% y/y). Shelter costs (32% of the CPI) gained 0.2% (2.6% y/y) as owners equivalent rent of primary residences rose 0.2% (2.5% y/y). Medical care services prices also rose 0.2% (2.5% y/y) for a third straight month. Recreation service prices ticked up 0.1% (1.7% 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 (%) Feb Jan Dec Feb Y/Y 2013 2012 2011
Total 0.1 0.1 0.2 1.1 1.5 2.1 3.2
Total less Food & Energy 0.1 0.1 0.1 1.6 1.8 2.1 1.7
  Goods less Food & Energy -0.1 -0.1 0.0 -0.4 -0.0 1.3 1.3
  Services less Energy 0.2 0.2 0.1 2.2 2.4 2.4 1.8
 Food 0.4 0.1 0.0 1.4 1.4 2.6 3.7
 Energy -0.5 0.6 1.6 -2.5 -0.7 0.9 15.2
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