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Economy in Brief

U.S. Consumer Price Index Unexpectedly Surges in October
by Tom Moeller  November 10, 2021

• Annual increase remains highest since 1990.

• Core inflation accelerates.

• Energy prices jump again.

The Consumer Price Index strengthened 0.9% (6.2% y/y) during October after increasing an unrevised 0.4% in September. A 0.6% rise had been expected in the Action Economics Forecast Survey. It was the largest y/y increase since November 1990. The CPI excluding food & energy increased 0.6% (4.6% y/y) last month following a 0.2% September gain. It was the largest y/y increase in 30 years. A 0.4% rise had been expected.

During the last six months, the CPI rose at a 7.7% annual rate. The 5.9% (AR) gain in the core CPI over the last six months was increased from 2.7% in the six months ending October 2020.

Goods prices excluding food & energy surged 1.0% in October (8.4% y/y). Used car & truck prices strengthened 2.5% (26.4% y/y) following two months of decline. The cost of new vehicles rose 1.4% (9.8% y/y) after five months of strong increase. Household furnishings prices rose 0.8% (6.1% y/y), the third consecutive month of strength, but prices of appliances eased 0.1% (+6.6% y/y) following two months of strong increase. Medical care product prices rose 0.6% (-0.4% y/y) after a 0.3% gain. Recreation product prices rose 0.4% (4.0% y/y) after slipping 0.2%. Apparel prices held steady (4.3% y/y) following a 1.3% September decline. Education & communication product costs declined 0.5% last month (+2.5% y/y) after improving 0.6% in September.

Services prices rose 0.4% last month (3.2% y/y) following a 0.2% September gain. Shelter prices increased 0.5% (3.5% y/y) after rising 0.4%. Owners' equivalent rent of primary residences improved 0.4% (3.1% y/y), the same as in August. Rents of primary residences gained 0.4% (2.7% y/y) last month after rising 0.5% in September while the cost of lodging away from home surged 1.4% (22.3% y/y) after falling for two months. Recreation services prices gained 0.8% in October (3.8% y/y) following a 0.4% September rise. Education & communication costs improved 0.2% last month (1.7% y/y) after a 0.4% strengthening. Medical care services surged 0.5% (1.7% y/y) after easing in September. Transportation services prices rose 0.4% (4.5% y/y) after three straight monthly declines, but public transportation costs weakened 0.7% (-1.1% y/y).

Energy prices shot up 4.8% in October (30.0% y/y), the fifth straight month of strong increase. Gasoline prices rose 6.1% last month (49.6% y/y) after strong gains during the prior four months. Fuel oil & other fuels prices surged 9.4% (48.3% y/y) after rising 3.1% in September. Natural gas prices surged 6.6% (28.1% y/y), strong for the ninth straight month, while the cost of electricity rose 1.8% last month (6.5% y/y) following a 0.8% September rise.

Food price inflation remained strong at 0.9% (5.3% y/y) last month, the strongest increase since April 2020. Meat, poultry & fish prices rose 1.9% (11.9% y/y) following a 2.2% increase, but egg prices eased 0.1% (+11.6% y/y). Dairy prices rose 0.2% (1.8% y/y). Cereal & bakery product costs strengthened 1.0% (3.5% y/y) while fruit & vegetable prices edged 0.1% higher (3.0% y/y) in October after rising 0.6%. Nonalcoholic beverage prices strengthened 0.8% (4.5% y/y) after four months of firm gains.

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) Oct Sep Aug Oct Y/Y 2020 2019 2018
Total 0.9 0.4 0.3 6.2 1.2 1.8 2.4
Total less Food & Energy 0.6 0.2 0.1 4.6 1.7 2.2 2.1
  Goods less Food & Energy 1.0 0.2 0.3 8.4 0.1 0.2 -0.2
  Services less Energy 0.4 0.2 0.0 3.2 2.2 2.8 2.9
 Food 0.9 0.9 0.4 5.3 3.4 1.9 1.4
 Energy 4.8 1.3 2.0 30.0 -8.5 -2.1 7.5
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