Global| May 18 2005Consumer Price Inflation Again Raised By Energy
by:Tom Moeller
|in:Economy in Brief
Summary
The CPI-U rose 0.6% in April due to a 4.5% jump in energy prices. Consensus expectations had been for a 0.4% rise in the total.Food prices also were strong posting a 0.7% advance, the strongest in nearly a year. Over the first four [...]
The CPI-U rose 0.6% in April due to a 4.5% jump in energy prices. Consensus expectations had been for a 0.4% rise in the total.Food prices also were strong posting a 0.7% advance, the strongest in nearly a year. Over the first four months of 2005 the CPI rose 4.8% at an annual rate.
Prices less food & energy were unchanged last month, the first unchanged monthly reading since 2003. During the first four months of this year the core CPI rose 2.6% at an annual rate. Consensus expectations had been for a 0.2% increase in April.
Core goods prices fell for the first month since last August. Apparel prices reversed much of the prior month's strength with a 0.6% decline (-0.5% y/y). Home furnishings & operation prices were unchanged for the second consecutive month due to a 1.5% (-0.8% y/y) drop in prices of window & wall coverings. Appliance prices (-0.1% y/y) and furniture prices (-0.6% y/y) also are down year to year. New & used motor vehicle prices were unchanged (+1.6% y/y).
Services price inflation eased. Less energy, the 0.2% increase was the weakest since January. Shelter prices were unchanged (2.7% y/y) following a 0.6% pop in March while the gain in medical care services prices halved to 0.3% (5.0% y/y). Public transportation prices were strong for the second consecutive month, up 1.7% (1.7% y/y), and school tuition rose another 0.6% (6.5% y/y).
Energy prices added to the prior month's increase. The 4.5% increase was pumped by a 6.4% (24.3% y/y) rise in gasoline prices, a 4.8% (33.4% y/y) jump in fuel oil prices and a 2.3% (8.1% y/y) surge natural gas & electricity prices. In May gasoline prices have fallen to an average $2.20 per gallon ($2.16 in the latest week) versus $2.24 averaged in April.
Food prices jumped 0.7% due to a 3.4% (5.2% y/y) recovery in fruit & vegetable prices following four months of decline. Beverage prices also were strong for the second month, up 1.1% (3.6% y/y) and prices of meat, poultry & fish prices doubled the 0.2% March increase (3.1% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases rose 0.5%. Core chain prices eased, however, to 0.2%.
A Walk Around the World Economy, remarks by Richard W. Fisher, President and Chief Financial Officer of the Federal Reserve Bank of Dallas are available here.
| Consumer Price Index | April | March | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total | 0.5% | 0.6% | 3.5% | 2.7% | 2.3% | 1.6% |
| Total less Food & Energy | 0.0% | 0.4% | 2.2% | 1.8% | 1.5% | 2.3% |
| Goods less Food & Energy | -0.1% | 0.0% | 0.5% | -0.9% | -2.0% | -1.1% |
| Services less Energy | 0.2% | 0.5% | 2.9% | 2.8% | 2.9% | 3.8% |
| Energy | 4.5% | 4.0% | 16.9% | 10.9% | 12.2% | -5.9% |
| Food | 0.7% | 0.2% | 3.1% | 3.4% | 2.1% | 1.8% |
| Chained CPI: Total (NSA) | 0.5% | 0.7% | 2.9% | 2.3% | 2.0% | 1.3% |
| Total less Food & Energy | 0.2% | 0.5% | 1.9% | 1.5% | 1.1% | 1.9% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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