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Economy in Brief

U.S. CPI Strengthens As Energy Prices Rise; Core Prices Increase Steadily
by Tom Moeller  August 13, 2019

Overall retail pricing power picked up last month. The Consumer Price Index rose 0.3% during July (1.8% y/y), up from 0.1% upticks in each of the prior two months. The rise matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy increased 0.3% (2.2% y/y), the same as in June. These two increases remained the largest since January 2018. A 0.2% increase had been expected.

Core goods price inflation moderated to 0.2% (0.4% y/y) after a 0.4% strengthening. Education & communications goods prices recovered 1.1% (-4.1% y/y) and tobacco prices jumped 1.0% (5.4% y/y). Furniture bedding prices rose 0.7% (3.9% y/y) but the cost of appliances weakened 0.8% (+0.6% y/y). Apparel prices rose 0.4% (-0.5% y/y) after a 1.1% jump. Used car & truck prices strengthened 0.9% (1.5% y/y) while new vehicle prices eased 0.2% (+0.3% y/y). Medical care goods prices rose 0.2% (-0.4% y/y) after two months of decline. The cost of recreation goods declined 0.4% (-1.4% y/y) as television prices weakened 1.0% (-20.2% y/y).

Services prices improved 0.3% (2.8% y/y) for a second consecutive month. The cost of public transportation strengthened 1.2% (0.7% y/y). Medical services prices rose an accelerated 0.5% (3.3% y/y) for the second time in three months. Shelter costs improved 0.3% (3.5% y/y) as hotel costs increased 0.9% (4.6% y/y). Primary residence rents rose 0.3% (3.8% y/y) and the owners' equivalent rent of primary residences gained 0.2% (3.4% y/y). Education & communication prices rose 0.2% (1.0% y/y). Recreation services costs rose 0.2% (1.7% y/y).

Energy prices rebounded 1.3% (-2.0% y/y) after declining for two months. Gasoline prices jumped 2.5% (-3.3% y/y) and fuel oil prices gained 0.6% (-6.0% y/y). The cost of electricity rose 0.6% (0.5% y/y) while natural gas costs declined 1.8% (-2.9% y/y).

Food & beverage prices held steady (1.8% y/y) for a second consecutive month. The cost of cereals & bakery products rose 0.3% (1.5% y/y). Fruit & vegetable prices also increased 0.3% (0.6% y/y), but meat, poultry and fish prices edged just 0.1% higher (0.9% y/y). Egg prices eased slightly (-14.1% y/y) while dairy & related product prices fell 0.3% (+0.9% y/y). Nonalchoholic beverage prices slipped 0.4% (+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) Jul Jun May Jul Y/Y 2018 2017 2016
Total 0.3 0.1 0.1 1.8 2.4 2.1 1.3
Total less Food & Energy 0.3 0.3 0.1 2.2 2.1 1.8 2.2
  Goods less Food & Energy 0.2 0.4 -0.1 0.4 -0.2 -0.7 -0.5
  Services less Energy 0.3 0.3 0.2 2.8 2.9 2.7 3.1
 Food 0.0 0.0 0.3 1.8 1.4 0.9 0.3
 Energy 1.3 -2.3 -0.6 -2.0 7.5 7.9 -6.6
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