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Economy in Brief

U.S. Consumer Prices Increase With Energy Price Turnaround; Core Prices Firm
by Tom Moeller  March 24, 2015

The consumer price index gained 0.2% (0.0% y/y), the first increase in four months. While the rise matched expectations in the Action Economics Forecast Survey, a 0.2% increase in the core price index surpassed the average forecast for a 0.1% rise.

A 1.0% increase in energy prices (-18.9% y/y) reflected a 2.4% rebound in gasoline prices (-32.8% y/y). Fuel oil prices gained 1.9% (-31.2% y/y) and electricity costs rose 0.3% (2.5% y/y). Natural gas prices declined 2.0% (-6.5% y/y).

Prices for goods excluding food & energy also showed improvement with a 0.2% gain (-0.5% y/y). The rise followed three consecutive months of decline and spread broadly amongst categories. Apparel prices increased a firm 0.3% (-0.8% y/y) led by a record 3.2% surge (0.1% y/y) in men's clothing prices. This was countered, however, by a 0.7% decline (-3.2% y/y) in women's apparel prices. Used vehicle prices jumped 1.0% (-2.9% y/y) and new vehicle prices gained 0.2% (0.6% y/y), the first rise in four months. Medical care goods prices improved 0.7% (3.9% y/y) after a 0.3% fall and education & communications goods prices slipped a lessened 0.1% (-4.0% y/y). Tobacco & smoking products prices rose 0.5% (2.6% y/y) following a 0.2% decline. Remaining weak were household appliance prices which fell 0.3% (-4.9% y/y) following a 0.1% uptick. Furniture & bedding costs were off 0.4% (-1.5% y/y) and recreation goods prices declined 0.2% (-3.0% y/y).

Showing less strength in pricing power were core services prices which posted a 0.1% uptick (2.5% y/y), the weakest gain in six months. Medical care services prices declined 0.2% (+1.8% y/y), the only material decline since 1975. Shelter prices rose 0.2% (3.0% y/y). Owners' equivalent rents of primary residence costs increased 0.2% (2.7% y/y) but rents of primary residences increased 0.3%. The 3.5% y/y rise here was improved from 0.2% growth in 2010. Tuition costs rose an easier 0.2% (3.3% y/y), recreation services prices ticked 0.1% higher (1.6% y/y) but public transportation prices remained unchanged (-1.9% y/y).

Food prices improved 0.2% (3.0% y/y). Egg prices rebounded 2.1% (8.5% y/y) and nonalcoholic beverage prices increased 0.6% (1.8% y/y). Meat prices ticked up 0.1% (10.6% y/y) but dairy prices declined 1.0% (+2.1% y/y). Fruit & vegetable costs inched 0.3% lower (+1.1% y/y). Cereal & bakery product prices fell 0.2% (+0.9% 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 2014 2013 2012
Total 0.2 -0.7 -0.3 0.0 1.6 1.5 2.1
Total less Food & Energy 0.2 0.2 0.1 1.7 1.7 1.8 2.1
  Goods less Food & Energy 0.2 -0.1 -0.2 -0.5 -0.3 -0.0 1.3
  Services less Energy 0.1 0.3 0.2 2.5 2.5 2.4 2.4
 Food 0.2 -0.0 0.2 3.0 2.4 1.4 2.6
 Energy 1.0 -9.7 -4.7 -18.9 -0.3 -0.7 0.9
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