Global| Jul 16 2004CPI Rose Slightly More Than Expected
by:Tom Moeller
|in:Economy in Brief
Summary
The Consumer Price Index (CPI-U) rose 0.3% in June versus Consensus expectations for a 0.2% rise. The upside surprise was fueled by a 2.6% gain in energy prices. Seasonally adjusted gasoline prices jumped 3.1%, about double the not [...]
The Consumer Price Index (CPI-U) rose 0.3% in June versus Consensus expectations for a 0.2% rise. The upside surprise was fueled by a 2.6% gain in energy prices.
Seasonally adjusted gasoline prices jumped 3.1%, about double the not seasonally adjusted rise. Even that increase was somewhat surprising given that the weekly tracking of retail gasoline prices indicated a m/m decline of 0.7%. So far in July average gasoline prices are 3.2% below the June average at $1.91 per gallon.
Core consumer prices rose a less than expected 0.1%. The shortfall was the result of no change in the prices of core consumer goods. New & used vehicle prices fell 0.1% (-3.5% y/y) and home furnishings prices rose a modest 0.1% (-0.5% y/y). Apparel prices rose 0.2% (0.5% y/y) and medical care commodities prices ticked 0.1% (2.9% Y/Y) higher.
Core service prices rose 0.2% for the second consecutive month. Shelter costs rose a modest 0.1% (2.9% y/y) and public transportation prices were unchanged after a 1.3% May decline (-0.9% y/y). Medical care services prices rose 0.4% (5.1% y/y), the strongest increase in three months.
The chained CPI which adjusts for shifts in consumer buying behavior rose 0.3%. It is similar to the PCE price deflator. The core chain price measure was unchanged.
| Consumer Price Index | June | May | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Total | 0.3% | 0.6% | 3.2% | 2.3% | 1.6% | 2.8% |
| Total less Food & Energy | 0.1% | 0.2% | 1.8% | 1.5% | 2.3% | 2.7% |
| Goods less Food & Energy | 0.0% | 0.1% | -1.0% | -2.0% | -1.1% | 0.3% |
| Services less Energy | 0.2% | 0.2% | 3.0% | 2.9% | 3.8% | 3.7% |
| Energy | 2.6% | 4.6% | 17.0% | 12.2% | -5.8% | 3.7% |
| Food | 0.2% | 0.9% | 3.8% | 2.1% | 1.8% | 3.1% |
| Chained CPI: Total (NSA) | 0.3% | 0.4% | 2.6% | 1.9% | 1.3% | 2.3% |
| Total less Food & Energy | 0.0% | -0.1% | 1.4% | 1.1% | 1.9% | 2.0% |
by Tom Moeller July 16, 2004
The University of Michigan’s consumer sentiment index for mid-July edged up to 96.0 from the June reading of95.6. Consensus expectations had been for a larger gain to 97.0.
During the last ten years there has been a 75% correlation between the level of consumer sentiment and the y/y change in real PCE.
Improvement in the expectations sub-index to 90.4 followed the sharp m/m rise in June. The index of current economic conditions fell 2.0% versus June.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.
| University of Michigan | Mid-July | June | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 96.0 | 95.6 | 5.6% | 87.6 | 89.6 | 89.2 |
| Current Conditions | 104.6 | 106.7 | 2.4% | 97.2 | 97.5 | 100.1 |
| Consumer Expectations | 90.4 | 88.5 | 8.0% | 81.4 | 84.6 | 82.3 |
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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