Global| Sep 17 2014U.S. Consumer Price Declines Are Broad-based
by:Tom Moeller
|in:Economy in Brief
Summary
The consumer price index declined 0.2% during August (+1.7% y/y) following an unrevised 0.1% uptick. The decline was the first since April of last year and missed expectations for no change in the Action Economics Forecast Survey. [...]
The consumer price index declined 0.2% during August (+1.7% y/y) following an unrevised 0.1% uptick. The decline was the first since April of last year and missed expectations for no change in the Action Economics Forecast Survey. Consumer prices excluding food and energy remained unchanged (1.7% y/y) following a 0.1% rise. Core consumer prices were weaker than expectations for a 0.2% increase.
Energy prices led the way lower with a 2.6% decline (0.3% y/y) as gasoline prices dropped 4.1% (-2.8% y/y). Natural gas prices fell 2.8% (+5.8% y/y), down for the fourth straight month, while fuel oil prices were off 1.2% (-0.2% y/y), a sixth consecutive monthly decline.
Weak pricing power also was evident in a 0.1% slip (-0.3% y/y) in prices for goods less food and energy. Appliance prices declined 0.9% (-4.75 y/y) while furniture & bedding prices were off 0.7% (-3.6% y/y). Recreation goods prices fell 0.3% (-3.0% y/y), down for the fourth straight month, and apparel prices dropped 0.2% (+0.1% y/y). Medical care goods prices slipped 0.1% (+2.6% y/y). To the upside, new vehicle prices increased 0.2% (0.4% y/y).
Core service prices showed no change (+2.4% y/y), the weakest monthly reading since January 2010. Transportation services prices declined 0.6% (+1.5% y/y), led lower by a 3.3% drop (-1.7% y/y) in public transportation costs. Recreation service prices followed with a 0.5% decline (+1.7% y/y). Tuition fees also slipped 0.1% (+3.1% y/y) while medical care services prices were unchanged (+1.9% y/y). Shelter costs (32% of the CPI) advanced 0.2% (2.9% y/y) for the second time in three months. Owners equivalent rent of primary residences improved 0.2% (2.7% y/y).
Food prices strengthened 0.2% (2.7% y/y) as meat prices jumped 2.5% (11.8% y/y). Dairy prices gained 0.6% (4.4% y/y) while cereal & bakery product prices improved 0.2% (0.3% y/y). To the downside were fruit & vegetable prices by 0.8% (0.1% y/y) and nonalcoholic beverage costs by 0.2% (-0.2% y/y).
The consumer price data is available in Haver's USECON database while detailed figures can be found in CPIDATA. The expectations figure is from Action Economics and is found in the AS1REPNA database.
| Consumer Price Index (%) | Aug | Jul | Jun | Aug Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Total | -0.2 | 0.1 | 0.3 | 1.7 | 1.5 | 2.1 | 3.2 |
| Total less Food & Energy | 0.0 | 0.1 | 0.1 | 1.7 | 1.8 | 2.1 | 1.7 |
| Goods less Food & Energy | -0.1 | -0.0 | 0.1 | -0.3 | -0.0 | 1.3 | 1.3 |
| Services less Energy | 0.0 | 0.1 | 0.1 | 2.4 | 2.4 | 2.4 | 1.8 |
| Food | 0.2 | 0.4 | 0.1 | 2.7 | 1.4 | 2.6 | 3.7 |
| Energy | -2.6 | -0.3 | 1.6 | 0.3 | -0.7 | 0.9 | 15.2 |
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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