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Economy in Brief

U.S. CPI Increase Is Surprisingly Moderate
by Tom Moeller  August 19, 2015

Earlier strength in consumer price inflation eased last month. The consumer price index increased 0.1% during July (0.2% y/y) following unrevised increases of 0.3% and 0.4% during the prior two months. Prices excluding food & energy notched 0.1% higher (1.8% y/y) following 0.2% and 0.1% increases. Both gains fell short of expectations for 0.2% in the total and the core measures in the Action Economics Forecast Survey.

Goods prices other than food & energy eased 0.1% (-0.5% y/y) for the third straight month. Prices have increased at a 0.1% rate so far this year after last year's 0.3% decline. Household furnishings & supplies prices declined 0.2% (-1.3% y/y) after declining 0.3% and 0.4% in the earlier two months. Appliance prices fell 1.0% (-3.9% y/y), down for the fifth month this year. Recreational product prices continued lower by 0.3% (-2.5% y/y) and haven't posted a monthly increase since last September. New vehicle prices eased 0.2% (+0.7% y/y), off for the first month in six. To the upside, apparel prices gained 0.3% (-1.6% y/y) after three straight down months. Medical care goods prices added 0.1% (3.1% y/y) after having been unchanged while educational book & supply prices jumped 0.7% (5.4% y/y).

Services prices less energy increased 0.2% (2.6% y/y) after a 0.3% rise. Prices have risen at a 2.9% rate this year. Shelter prices led the latest gain with a 0.4% rise, the strongest increase since February 2007. The cost of lodging away from home jumped 2.5% (2.9% y/y) and primary residence rents improved 0.3% (3.6% y/y). Owners' equivalent rent of primary residence also rose 0.3% (3.0% y/y). Recreation services prices rose 0.2% (2.0% y/y), the weakest gain in four months and medical care services costs ticked 0.1% higher (2.3% y/y). The cost of using public transportation declined 3.2% (-3.1% y/y). Tuition & other school fees costs remained unchanged (+3.7% y/y), the weakest monthly reading in twelve months.

Food prices rose 0.2% (1.6% y/y), pulled up by a 3.3% rise (24.9% y/y) in egg prices. Fruit & vegetable prices rose 0.3% (-1.9% y/y) and cereal & bakery product prices improved 0.2% (1.3% y/y). Meat prices ticked 0.1% higher (3.1% y/y).

Energy prices improved 0.1% (-14.8% y/y). Gasoline prices increased 0.9% (-22.3% y/y), the fifth increase this year, but fuel oil costs fell 3.4% (NSA, -29.7% y/y). Utility costs declined 1.4% (-14.2% y/y) and electricity costs were off 0.4% (-0.7% 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.

The minutes to the latest FOMC meeting can be found here.

Consumer Price Index, All Urban Consumers (%) Jul Jun May Jul Y/Y 2014 2013 2012
Total 0.1 0.3 0.4 0.2 1.6 1.5 2.1
Total less Food & Energy 0.1 0.2 0.1 1.8 1.7 1.8 2.1
  Goods less Food & Energy -0.1 -0.1 -0.1 -0.5 -0.3 -0.0 1.3
  Services less Energy 0.2 0.3 0.2 2.6 2.5 2.4 2.4
 Food 0.2 0.3 0.0 1.6 2.4 1.4 2.6
 Energy 0.1 1.7 4.3 -14.8 -0.3 -0.7 0.9
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