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Economy in Brief

U.S. CPI Strengthens But Core Price Gain Moderates
by Tom Moeller  March 12, 2019

The Consumer Price Index increased 0.2%, as expected, during February following three consecutive months of holding steady. The expectations figure is from the Action Economics Forecast Survey. The 1.5% y/y increase was the weakest since September 2016. The CPI excluding food & energy nudged 0.1% higher following 0.2% increases during each of the prior five months. A 0.2% rise had been expected. The 2.1% y/y rise was last seen in October.

Energy prices rebounded 0.4% (-5.0% y/y) following declines in four of the prior five months. Fuel oil prices jumped 2.6% (-2.4% y/y) and gasoline prices rebounded 1.5% (-9.1% y/y), after three straight months of roughly 5.0% decline. These gains were offset by declines in natural gas (-2.6% y/y) as well as electricity costs. The latter were unchanged y/y.

Food prices also strengthened 0.4%. That raised the y/y increase to 2.0%, up from a low of 0.3% in 2016. A 0.9% improvement (2.0% y/y) in fruit & vegetable prices led the rise followed by a 0.7% strengthening (1.8% y/y) in cereal & bakery product costs. Meat, poultry & fish prices rose 0.3% (1.0% y/y) while dairy & related product pries also improved 0.3% (0.1% y/y). Egg prices fell 1.4% (-5.9% y/y) while nonalcoholic beverage costs rose 0.7% (2.8% y/y).

Nonenergy services prices improved 0.2% (2.7% y/y) for the fifth straight month. Shelter prices increased 0.3% (3.4% y/y). The owners' equivalent rent of primary residences gained an improved 0.3% (3.3% y/y) and rents of primary residences also increased 0.3% (3.5% y/y). The cost of education & communication gained 0.2% (1.1% y/y) and the price of public transportation also improved 0.2% (-1.8% y/y) after declining for five straight months. Medical care prices were steady (2.4% y/y) after a 0.3% rise while recreation service costs fell 0.2% (+2.2% y/y).

Goods prices excluding food & energy eased 0.2%, but the 0.1% y/y rise compared to price declines from 2013 to 2018. Home furnishings prices rose 0.3% and by a strengthened 1.5% y/y. That included a 6.8% y/y surge in appliance costs. Apparel prices improved 0.3% (-0.8% y/y) but medical care goods prices weakened 1.0% (-1.1% y/y). Recreation product prices fell 0.9% (-1.4% y/y) while education & communication goods were off 0.5% (-4.7% y/y).

Real average hourly earnings increased 0.3% (1.9% y/y).

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) Feb Jan Dec Feb Y/Y 2018 2017 2016
Total 0.2 0.0 0.0 1.5 2.4 2.1 1.3
Total less Food & Energy 0.1 0.2 0.2 2.1 2.1 1.8 2.2
  Goods less Food & Energy -0.2 0.4 0.0 0.1 -0.2 -0.7 -0.5
  Services less Energy 0.2 0.2 0.2 2.7 2.9 2.7 3.1
 Food 0.4 0.2 0.3 2.0 1.4 0.9 0.3
 Energy 0.4 -3.1 -2.6 -5.0 7.5 7.9 -6.6
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