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Economy in Brief

U.S. Consumer Price Index & Core Prices Fall Again
by Tom Moeller  May 12, 2020

• Lower energy prices lead the decline.

• Food prices jump with increased at-home consumption.

• Core goods prices broadly weaken.

The CPI fell 0.8% (+0.3%) during April, the largest decline since late-2008. The fall was double the prior month's decline. Expectations had been for a 0.7% decline in the Action Economics Forecast Survey. The CPI excluding food & energy weakened 0.4% (+1.4% y/y) last month after a 0.1% slip. The decline was a record and double the expected increase.

Lower energy prices pulled the CPI down with a 10.1% drop (-17.7% y/y), the largest of four consecutive monthly declines. Gasoline prices dropped 20.6% (-32.0% y/y), double the prior month's decline. Fuel oil prices fell 15.6% (-33.2% y/y) to the lowest price since early-2016. Natural gas prices rose 0.2% (-1.9% y/y) following two months of sharp decline while the cost of electricity edged 0.1% higher (0.2% y/y).

Food prices increased 1.5% in April (3.5% y/y), strengthened by a 2.6% rise (4.1% y/y) in the cost of food for at-home consumption. Prices for food purchased for consumption outside the home edged 0.1% higher (NSA, +2.8% y/y). Egg prices surged 16.1% (17.3% y/y) while meat, poultry & fish prices increased 3.6% (6.2% y/y). Cereal & bakery prices jumped 2.9% (3.1% y/y). Nonalcoholic beverage prices also strengthened 2.9% (5.0% y/y). Fruit & vegetable prices improved 1.5% (0.4% y/y) and dairy prices also increased 1.5% (5.2% y/y).

Goods prices excluding food & energy weakened 0.7% last month (-0.9% y/y) after weakening 0.3%. The decline was led by a 4.7% fall (-5.7% y/y) in apparel prices. Recreation goods prices declined 0.9% (-2.0% y/y) and prices for medical care goods eased 0.1% (+0.7% y/y). New vehicle prices were little-changed (-0.6% y/y) and used car & truck prices fell 0.4% (-0.7% y/y). Moving higher were appliance prices which jumped 1.1% (0.6% y/y) while household furnishings prices improved 0.6% (-0.4% y/y). Prices for education & communication goods rose 0.2% (-3.8% y/y).

Services prices weakened 0.4% in April (+2.2% y/y), a huge decline which was the largest since July 1980. It was paced by a 9.4% drop (-16.0% y/y) in the cost of public transportation. Recreation services prices rose 0.2% (2.4% y/y). Medical care service prices improved 0.5% (5.8% y/y) for a second straight month. Education & tuition prices edged 0.1% higher (2.1% y/y) for a third straight month. Shelter costs held steady (2.6% y/y) for a second month but the owners' equivalent rent of primary residences gained 0.2% (3.1% y/y).

The Consumer Price Index 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) Apr Mar Feb Apr Y/Y 2019 2018 2017
Total -0.8 -0.4 0.1 0.3 1.8 2.4 2.1
Total less Food & Energy -0.4 -0.1 0.2 1.4 2.2 2.1 1.8
  Goods less Food & Energy -0.7 -0.3 0.2 -0.9 0.2 -0.2 -0.7
  Services less Energy -0.4 -0.0 0.2 2.2 2.8 2.9 2.7
 Food 1.5 0.3 0.4 3.5 1.9 1.4 0.9
 Energy -10.1 -5.8 -2.0 -17.7 -2.1 7.5 7.9
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