Global| Jul 31 2006More Readings of 2Q Price Inflation
by:Tom Moeller
|in:Economy in Brief
Summary
An acceleration in the "core" PCE chain price index within the 2Q GDP report rankled markets on Friday. At 2.9%, the q/q increase was a marked acceleration from the 2.0% average of the prior four quarters Indeed, the price index for [...]
An acceleration in the "core" PCE chain price index within the 2Q GDP report rankled markets on Friday. At 2.9%, the q/q increase was a marked acceleration from the 2.0% average of the prior four quarters
Indeed, the price index for durable personal consumption indicated deflation at a slower rate and the y/y gain in service prices accelerated to 3.6% from a low of 3.1% late last year. That acceleration reflected a 5.0% surge during 4Q05.
The price index for clothing & shoes was, however, the main bugger as it posted a 3.5% gain (AR) last quarter after several years of price deflation.
Several price indexes showed slower rates of growth including most business investment categories, residential investment and federal government.
Also moving moderately to the upside were the gains in the price indexes for state & local government as well as exports. Continuing strong were the gains in the nonresidential investment chain price index for structures, up 10.7% (AR) last quarter and 13.3% y/y after an 11.3% surge last year.
| Chain Price Indexes | 2Q '06 | 1Q '06 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| GDP | 3.3% | 3.3% | 3.3% | 3.0% | 2.8% | 2.1% |
| Personal Consumption | 4.1% | 2.0% | 3.3% | 2.9% | 2.6% | 2.0% |
| Less Food & Energy | 2.9% | 2.1% | 2.3% | 2.1% | 2.0% | 1.4% |
| Durables | -0.8% | -1.0% | -1.5% | -0.7% | -1.6% | -3.6% |
| Nondurables | 3.3% | 3.3% | 3.3% | 3.0% | 2.8% | 2.1% |
| Clothing & Shoes | 3.5% | -1.0% | -0.4% | -1.0% | -0.4% | -2.5% |
| Services | 3.1% | 3.1% | 3.6% | 3.2% | 3.2% | 3.2% |
| Investment: Equipment & Software | 0.0% | 0.6% | -0.5% | -0.4% | -0.4% | -1.1% |
| Investment: Residential | 2.0% | 3.8% | 4.8% | 5.1% | 7.3% | 4.8% |
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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