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Economy in Brief

U.S. CPI Gain Unexpectedly Moderates in October
by Tom Moeller  November 10, 2022

• Year-to-year gains diminish.

• Core prices lead moderation.

• Food prices remain firm; energy costs rebound.

The price inflation environment cooled off a bit in October. Consumer prices rose 0.4% (7.7% y/y), repeating the September gain. These readings remain below the 1.0% and 1.3% increases logged in May and June when energy prices were rising more quickly. A 0.6% October rise had been expected in the Action Economics Forecast Survey. Prices excluding food and energy improved 0.3% last month after two straight 0.6% gains. The 6.3% y/y gain remained close to the strongest since August 1982. A 0.5% October increase had been expected.

Energy prices strengthened 1.8% last month (17.6% y/y) led by fuel oil prices which rose 10.5% (44.2% y/y). Gasoline prices increased 4.0% (17.5% y/y) following three straight monthly declines. Electricity prices edged 0.1% higher (14.1% y/y). Natural gas prices declined 4.6%, though they rose 20.0% y/y.

Food prices increased 0.6% in October (10.9% y/y), down from two straight 0.8% monthly gains. Food prices away from home increased 0.9% (NSA, 8.6% y/y). Cereal & bakery product prices rose 0.8% (15.9% y/y) while egg prices jumped 10.1% (43.0% y/y). Beverage prices gained 0.5% (12.7% y/y). To the downside, fruit & vegetable prices fell 0.9% (+9.3% y/y) while meat, poultry & fish prices eased 0.1% (+5.9% y/y). The cost of dairy products also slipped 0.1% (+15.5% y/y).

Services prices less energy increased 0.5% (6.7% y/y) last month, the weakest increase in three months. Education & communication costs improved 0.1% (1.4% y/y) but medical care services prices declined 0.6% (+5.4% y/y). Transportation services prices strengthened 0.8% (15.2% y/y) while recreation service prices also gained 0.8% (3.9% y/y). Shelter costs increased 0.8% (6.9% y/y) as the owners' equivalent rent of primary residences gained 0.6% (6.9% y/y) and rental costs increased 0.7% (7.5% y/y). The cost of lodging away from home jumped 4.9% (5.9% y/y).

Goods prices less food & energy declined 0.4% in October (+5.1% y/y) after holding steady in September. Household furnishings prices weakened 0.2% (+8.8% y/y) and appliance costs declined 0.5% (+0.9% y/y), off for the fourth straight month. Medical care product prices held steady (+3.1% y/y) while apparel prices fell 0.7% (+4.1% y/y), down for the second straight month. To the upside, recreation product prices increased 0.7% (4.3% y/y) and new vehicle prices increased 0.4% (8.4% 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.

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