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Economy in Brief

U.S. Consumer Price Index Growth Continues to Slow in September
by Tom Moeller  October 13, 2020

• Core goods remain firm.

• Services prices are little changed.

Retail pricing power weakened further last month. The Consumer Price Index increased 0.2% (1.4% y/y) during September following a 0.4% August rise and a 0.6% gain in July. The increase matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy also rose 0.2% (1.7% y/y) last month after increasing 0.4% in August and 0.6% in July, also matching expectations.

Goods prices excluding food & energy increased a firm 0.8% (1.0% y/y) after a 1.0% increase in August. Used car & truck prices remained strong and posted a 6.7% gain (10.3% y/y). New vehicle prices rose 0.3% (1.0% y/y). Elsewhere, goods prices declined. The cost of appliances weakened 1.8% (+3.9% y/y) after three consecutive months of strength. Household furnishings costs eased 0.2% (2.1% y/y) after five straight months of strength. Apparel prices fell 0.5% (-6.0% y/y) after a 0.6% rise. Recreation goods prices fell 0.4% (-0.8% y/y) following a 1.1% rise. Prices for education & communication goods weakened 2.5% (-6.0% y/y) following a 0.5% rise. Prices for medical care goods held steady (0.9% y/y) after a 0.1% dip.

Services prices eased slightly (+1.9% y/y) last month following a 0.2% gain. Education & communication prices held steady (2.8% y/y) as tuition costs fell 0.3% (1.5% y/y). Medical care service prices also were unchanged (4.9% y/y) after a 0.1% rise. Shelter costs rose 0.1% (2.0% y/y) as the owners' equivalent rent of primary residences also increased 0.1%, but by a greatly reduced 2.3% y/y. To the upside, recreation services prices improved 0.5% (2.7% y/y) for a second straight month. The cost of public transportation rose 1.3% (-16.5% y/y), reversing the August decline.

Energy product prices were strong, rising 0.8% (-7.7% y/y) in September following three months of even stronger increase. The strength was paced by a 4.2% jump (3.8% y/y) in the cost of natural gas. Electricity prices rose 0.9% (0.7% y/y) following declines in three of the prior four months. Gasoline prices improved 0.1% (-15.4% y/y) after three months of strong increase while fuel oil prices declined 3.1% (-17.6% y/y), also following three strong monthly increases.

Food prices held steady (3.9% y/y) last month after a 0.1% rise. Food-at-home prices declined 0.4% (+4.1% y/y), the third straight monthly fall. The weakening reflected a 0.9% decline (+0.1% y/y) in egg prices. Meat, poultry & fish prices were off 0.3% (+6.7% y/y). Cereal & cereal product prices rose 0.8% (2.6% y/y) but bakery product prices eased 0.1% (NSA, +2.6% y/y). Fruit & vegetable prices fell 0.4% (+3.0% y/y). Dairy & dairy product prices declined 0.5% (+5.0 y/y). Nonalcoholic beverage prices eased 0.8% (+4.2% y/y). Prices for food away from home rose 0.6% (NSA, 3.8% 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) Sep Aug Jul Sep Y/Y 2019 2018 2017
Total 0.2 0.4 0.6 1.4 1.8 2.4 2.1
Total less Food & Energy 0.2 0.4 0.6 1.7 2.2 2.1 1.8
  Goods less Food & Energy 0.8 1.0 0.7 1.0 0.2 -0.2 -0.7
  Services less Energy -0.0 0.2 0.6 1.9 2.8 2.9 2.7
 Food 0.0 0.1 -0.4 3.9 1.9 1.4 0.9
 Energy 0.8 0.9 2.5 -7.7 -2.1 7.5 7.9
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