Global| Oct 18 2006CPI Fell 0.5%, Core Rose an Expected 0.2%
by:Tom Moeller
|in:Economy in Brief
Summary
The consumer price index (CPI-U) fell 0.5% last month due to sharply lower energy prices. The decline outpaced expectations for a 0.3% drop and was the largest m/m decline since last November. The 0.2% rise in prices less food & [...]
The consumer price index (CPI-U) fell 0.5% last month due to sharply lower energy prices. The decline outpaced expectations for a 0.3% drop and was the largest m/m decline since last November. The 0.2% rise in prices less food & energy was the third in a row and was as expected.
Energy prices were led 7.2% lower in September by a 13.5% drop in gasoline and a 4.9% (+0.5% y/y) fall in fuel oil prices. Gasoline prices have since fallen another 11.3% so far in October (-16.6% y/y) to an average $2.27 per gallon. Natural gas & electricity prices in September rose 1.2% (5.8% y/y).
Core goods prices fell 0.1% though apparel prices were strong and posted a 0.6% (0.9% y/y) gain after rising 0.9% in August. Appliance prices also rose a firm 0.7% (1.3% y/y) but furniture & bedding prices fell 0.7% (+1.4% y/y) while other equipment & furnishings prices dropped 1.9% (-6.5% y/y). New & used motor vehicle prices also slipped 0.3% (-0.1% y/y) and tobacco prices fell 0.1% (+2.1% y/y). Medical care commodity prices rose 0.2% (3.8% y/y).
Core services prices rose 0.3% as shelter prices rose 0.3% (4.2% y/y). The rental equivalence measure of owners' primary residences rose 0.3% (4.0% y/y) for the second month and rents rose 0.4% (3.9% y/y) for the fourth straight month. Public transportation costs fell 0.7% (+3.9% y/y), the first m/m decline since March. Education costs rose 0.2% (6.1% y/y) and medical care services prices rose 0.4% (4.4% y/y) for the second month.
Food & beverage prices rose 0.4% as meat, fish & poultry prices increased 0.5% (1.6% y/y) and fruit & vegetable prices surged another 3.0% (7.3% y/y). Dairy prices were unchanged (-1.0% y/y).
The chained CPI, which adjusts for shifts in the mix of consumer purchases, fell 0.3% but less food & energy prices rose 0.3%.
The Quantity Theory of Money from the Federal Reserve Bank of St. Louis can be found here.
| Consumer Price Index | September | August | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Total | -0.5% | 0.2% | 2.1% | 3.4% | 2.7% | 2.3% |
| Total less Food & Energy | 0.2% | 0.2% | 2.9% | 2.2% | 1.8% | 1.5% |
| Goods less Food & Energy | -0.1% | 0.2% | 0.5% | 0.5% | -0.9% | -2.0% |
| Services less Energy | 0.3% | 0.2% | 3.9% | 2.8% | 2.8% | 2.9% |
| Energy | -7.2% | 0.3% | -4.5% | 16.9% | 10.8% | 12.2% |
| Food & Beverages | 0.4% | 0.3% | 2.6% | 2.4% | 3.4% | 2.1% |
| Chained CPI: Total (NSA) | -0.3% | 0.3% | 2.2% | 2.9% | 2.5% | 2.0% |
| Total less Food & Energy | 0.3% | 0.3% | 2.7% | 1.9% | 1.7% | 1.1% |
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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