Global| Oct 15 2010CPI Ticks Higher For Month And Decelerates Y/Y
by:Tom Moeller
|in:Economy in Brief
Summary
Pricing is stuck in the moderate demand and abundant supply environment of the U.S. economy. Consumer prices rose 0.1% last month and failed to meet expectations for a 0.2% rise. The weakness of the increase lowered the y/y change to [...]
Pricing is stuck in the moderate demand and abundant supply environment
of the U.S. economy. Consumer prices rose 0.1% last month and failed to
meet expectations for a 0.2% rise. The weakness of the increase lowered
the y/y change to 1.1%, its smallest since last autumn. During the first
nine months of this year prices rose at a 0.7% annual rate. The moderate
pricing story does not end here. The CPI excluding food & energy was
unchanged for the second consecutive month during September and that too
fell short of Consensus expectations. So far this year core prices have
risen at a 0.6% annual rate.
Earlier strength in energy prices lost strength last month and posted just a 0.7% increase, down sharply from the prior two months. Since December, energy prices have been roughly unchanged. Gasoline prices rose 1.6% last month but they're roughly unchanged this year (5.1% y/y). Natural gas & electricity prices fell 0.8% (+1.5%y/y) while fuel oil prices (NSA) rose 1.0% (12.3% y/y). Food & beverage prices rose 0.3% last month reflecting strength in meat prices (4.7% y/y) as well as dairy products (2.9% y/y). Reflecting the weak economy, the cost of eating out rose just 1.4% y/y.
Core consumer pricing power remained under wraps as prices excluding foods & fuel were unchanged for the second consecutive month. That lowered the y/y gain to 0.8%, the least since 1960. A 0.1% September uptick had been expected. Year-to-date prices rose at an even slower 0.6% annual rate. Core goods prices are unchanged since December, despite a 6.9% rise in tobacco prices. New and used motor vehicle prices have risen 2.1% this year while prices of home furnishings & operation fell 3.0%. Apparel prices fell 1.4%.
Core services prices also have shown little strength this year. They rose just 0.1% last month and at a 0.8% rate since December. Medical care continued as an area strength posting a 0.8% increase and a 3.9% (AR) gain since December. Education costs slipped m/m but they too have been strong posting a 4.0% gain (AR) this year. Easier shelter costs have offset this strength and have fallen at a 0.3% rate this year. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, has been unchanged after a 2.1% gain in 2009. These latest readings are the weakest since the series' start in 1983. Public transportation costs also have risen at just a 1.1% rate this year.
The chained CPI, which adjusts for shifts in consumption patterns, ticked up 0.1% for the second consecutive month and rose 0.9% year-to-year. Chained prices less food & energy also ticked 0.1% higher and were up only 0.5% y/y.
The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database.
Improving Survey Measures of Household Inflation Expectations from the Federal Reserve Bank of New York is available here.
| Consumer Price Index (%) | September | August | July | Sept. Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | 0.1 | 0.3 | 0.3 | 1.1 | -0.3 | 3.8 | 2.9 |
| Total less Food & Energy | 0.0 | 0.0 | 0.1 | 0.8 | 1.7 | 2.3 | 2.3 |
| Goods less Food & Energy | -0.2 | 0.1 | 0.2 | 0.7 | 1.3 | 0.1 | -0.4 |
| Services less Energy | 0.1 | 0.0 | 0.1 | 0.8 | 1.9 | 3.1 | 3.4 |
| Energy | 0.7 | 2.3 | 2.6 | 3.9 | -18.1 | 13.7 | 5.6 |
| Food & Beverages | 0.3 | 0.1 | -0.0 | 1.4 | 1.9 | 5.4 | 3.9 |
| Chained CPI: Total (NSA) | 0.1 | 0.1 | -0.0 | 0.9 | -0.1 | 3.7 | 2.5 |
| Total less Food & Energy | 0.1 | 0.1 | -0.0 | 0.5 | 1.5 | 2.0 | 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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