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Economy in Brief

U.S. CPI Increases Steadily M/M; Core Prices Pick Up
by Tom Moeller  June 12, 2018

Consumer prices increased 0.2% (2.8% y/y) during May for the second straight month. The gain matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy rose an expected 0.2% (2.2% y/y) after a 0.1% rise.

Last month's increase was led by a 0.9% rise (11.7% y/y) in energy prices which followed a 1.4% strengthening during April. Gasoline prices increased 1.7% (21.8% y/y) after a 3.0% rise, but fuel oil costs fell 0.7% (+25.3% y/y) on the heels of a 2.7% increase. Electricity prices ticked 0.1% higher (1.0% y/y) after a 0.6% decline, but natural gas prices fell 0.6% (-0.8% y/y), off for the third consecutive month.

Goods prices excluding food & energy slipped 0.1% for the third straight month. The 0.3% y/y decline in prices, however, moderated from the 1.0% y/y drop in October. Prices for used cars & trucks fell 0.9% (-1.7% y/y), down for the fourth straight month. New vehicle prices increased 0.3% (-1.1% y/y) after declines in three of the prior four months. Recreation product prices fell 0.7% (-3.3% y/y) as prices for video & audio products dropped 0.8% for the third straight month (-12.6% y/y). Furniture & bedding costs were off 0.3% (-0.1% y/y), but appliance prices rose 0.3% (-0.1% y/y) following two months of strong increase. Medical care product prices surged 1.3% (2.7% y/y) after a slight dip, but apparel prices held steady (-1.4% y/y) following a 0.3% rise.

Services prices less energy increased 0.3% (3.0% y/y) after a 0.2% rise. Recreation services led the gain with a 0.4% rise (+1.8% y/y) which followed two months of decline. Education & communication services prices also improved 0.4% (0.7% y/y) after declining during each of the prior four months. Shelter prices rose 0.3% (3.5% y/y) for the second straight month reflecting a 0.3% increase (3.6% y/y) in rents of primary residences. The owners' equivalent rent of primary residences increased 0.3% (3.4% y/y) for the third straight month. Medical care services prices eased 0.1% (+2.3% y/y) after a 0.2% gain, but public transportation costs fell 1.2% (-2.8% y/y) led by a 1.9% drop (-6.6% y/y) in airline fares.

Food prices held steady last month (1.2% y/y) after increasing 0.3% in April. Fruit & vegetable prices eased 0.3% (-0.4% y/y) after a 1.0% jump. Meat prices declined 0.7% (+1.4% y/y). Egg prices fell 3.3%, but were up by nearly one-quarter y/y. Dairy & related product prices eased 0.1% (-0.6% y/y), after a 0.4% rise. Cereal & bakery product prices held steady (-0.2% y/y), following a 0.2% dip. Nonalchoholic beverage prices rose 0.4% (-1.3% y/y), after a 0.6% decline.

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) May Apr Mar May Y/Y 2017 2016 2015
Total 0.2 0.2 -0.1 2.8 2.1 1.3 0.1
Total less Food & Energy 0.2 0.1 0.2 2.2 1.8 2.2 1.8
  Goods less Food & Energy -0.1 -0.1 -0.1 -0.3 -0.7 -0.5 -0.5
  Services less Energy 0.3 0.2 0.3 3.0 2.7 3.1 2.6
 Food 0.0 0.3 0.1 1.2 0.9 0.3 1.9
 Energy 0.9 1.4 -2.8 11.7 7.9 -6.6 -16.7
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