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Economy in Brief

U.S. CPI Firms as Energy Prices Strengthen
by Tom Moeller  November 13, 2019

The Consumer Price Index increased 0.4% (1.8% y/y) during October following stability in September. It was the largest increase since March. Expectations had been for a 0.3% rise in the Action Economics Forecast Survey. The CPI excluding food & energy rose an expected 0.2% (2.3% y/y) following a 0.1% uptick.

Providing strength to consumer price inflation last month was a 2.7% increase (-4.2% y/y) in energy prices. This followed declines during four of the prior five months. Gasoline prices increased 3.7% (-7.3% y/y), also following declines in four of the prior five months. Fuel oil prices improved 0.8% (-10.6% y/y) after similar weakness in earlier months. The cost of natural gas surged 2.4% (0.2% y/y) following a 0.7% decline. Electricity prices strengthened 1.6% (0.4% y/y) after remaining unchanged.

Services prices increased 0.2% (3.0% y/y) following four straight 0.3% monthly increases. Exhibiting strength last month were medical care prices which rose 0.9% (5.1% y/y) for the second time in three months. Recreation services costs also strengthened 0.9% (2.3% y/y) following a slight September decline. The cost of shelter edged 0.1% higher (3.3% y/y). The owners' equivalent rent of primary residences rose 0.2% (3.3% y/y) while rents of primary residences improved 0.1% (3.7% y/y). The cost of lodging away from home declined 3.8% (+2.0% y/y) after a 2.1% rise. Education & communication costs improved 0.2% (1.1% y/y). Transportation services prices rose 0.1% (0.8% y/y) but public transportation prices fell 0.5% (+1.4% y/y).

Consumer goods prices excluding food & energy weakened 0.1% last month following a 0.3% fall. The y/y rise of 0.3% compared to a 1.0% decline during October 2017. Education & communications goods prices declined 1.9% (-5.2% y/y) and added to a 1.2% September decline. Apparel prices were off 1.8% (-2.3% y/y) after a 0.3% slip. Prices of new vehicles weakened 0.2% (+0.1% y/y), down slightly for the fourth consecutive month. Furniture & bedding prices slipped 0.1%. To the upside, used car & truck prices surged 1.3% (1.4% y/y) on the heels of a 1.6% decline. Medical care goods prices improved 1.2% (1.0% y/y) after falling 0.6%. Household appliance prices gained 0.4% (-0.7% y/y). The 2.1% y/y increase compared to a 0.7% y/y decline as of August last year. Recreation goods prices improved 0.4% (0.7% y/y) after rising 0.2% in the prior two months.

Food prices rose 0.2% (2.1% y/y) in October after a 0.1% uptick. Fruit & vegetable prices strengthened 0.9% both m/m and y/y. Meat, poultry & fish prices rose 0.8% (1.7% y/y) and dairy product prices increased 0.1% (1.8% y/y). Cereal & bakery product costs slipped 0.1% (+1.5% y/y). Egg prices weakened 2.7% (-8.7% y/y). Nonalcoholic beverage prices declined 0.3% (+0.8% 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.

The Economic Outlook is the title of today's testimony by Federal Reserve Chair Jerome H. Powell. It can be found here.

Consumer Price Index, All Urban Consumers (% chg) Oct Sep Aug Oct Y/Y 2018 2017 2016
Total 0.4 0.0 0.1 1.8 2.4 2.1 1.3
Total less Food & Energy 0.2 0.1 0.3 2.3 2.1 1.8 2.2
  Goods less Food & Energy -0.1 -0.3 0.2 0.3 -0.2 -0.7 -0.5
  Services less Energy 0.2 0.3 0.3 3.0 2.9 2.7 3.1
 Food 0.2 0.1 0.0 2.1 1.4 0.9 0.3
 Energy 2.7 -1.4 -1.9 -4.2 7.5 7.9 -6.6
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