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Economy in Brief

U.S. CPI Remains Subdued
by Tom Moeller  August 11, 2017

The Consumer Price Index ticked 0.1% higher (1.7% y/y) during July following no change in June. A 0.2% increase had been expected in the Action Economics Forecast Survey. Prices excluding food & energy gained 0.1% (1.7% y/y) for the fourth straight month. A 0.2% rise was anticipated.

A 0.1% decline (-0.6% y/y) in goods prices excluding food and energy held back the overall price gain. It was the sixth consecutive monthly shortfall. A 0.5% decline in both new (-0.6% y/y) and used (-4.1% y/y) vehicle prices led last month's weakness. Home furnishings prices also declined 0.5% (-1.7% y/y) and home appliance prices eased 0.2% (-3.3% y/y). Recreation product prices fell 0.4% (-2.9% y/y). These declines were countered by a 1.0% rise (3.7% y/y) in medical care goods costs. Education & communication product prices increased 0.9% (-1.8% y/y).

Continuing to move higher were services prices by 0.2% for the third straight month. The y/y increase of 2.4% compares to a 3.2% rise as of September. Shelter prices ticked 0.1% higher (3.2% y/y), the weakest increase in four months. Holding back last month's gain was a 4.2% decline (-2.4% y/y) in the cost of lodging away from home. Owners' equivalent rents of primary residences gained 0.3% (3.2% y/y) and rents of primary residences gained 0.2% (3.8% y/y).

Energy prices eased 0.1% (+3.4% y/y), down for the fifth month in the last six. Fuel oil prices fell 1.2% (+4.6% y/y) and gasoline prices held steady (+3.0% y/y). Also moving lower were natural gas costs by 2.3% (+7.5% y/y). Electricity prices rose 0.4% (2.6% y/y).

Food prices improved 0.2% (1.1% y/y), pulled higher by a 1.3% jump (1.1% y/y) in meat prices. Lower egg prices countered this gain with a 2.1% decline (-9.5% y/y). Cereal & bakery product prices also eased 0.2% (-0.5% y/y), but dairy product costs gained 0.3% (0.9% y/y). Fruit & vegetable prices strengthened 0.5% (1.0% y/y). Nonalchoholic beverage prices fell 0.2% (+0.3% y/y). The cost of eating out also rose 0.2% (2.1% y/y), the weakest annual gain since 2013.

The Consumer Price Data can be found in Haver's USECON data base with additional detail in the Action Economics figure is in the AS1REPNA database.

The Changing Cyclicality of Labor Force Participation from the Federal Reserve Bank of Kansas City is available here.

Consumer Price Index, All Urban Consumers (%) Jul Jun May Jul Y/Y 2016 2015 2014
Total 0.1 0.0 -0.1 1.7 1.3 0.1 1.6
Total less Food & Energy 0.1 0.1 0.1 1.7 2.2 1.8 1.7
  Goods less Food & Energy -0.1 -0.1 -0.3 -0.6 -0.5 -0.5 -0.3
  Services less Energy 0.2 0.2 0.2 2.4 3.1 2.6 2.5
 Food 0.2 0.0 0.2 1.1 0.3 1.9 2.4
 Energy -0.1 -1.6 -2.7 3.4 -6.6 -16.7 -0.3
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