Global| Jul 16 2008U.S. Consumer Price Index Jumped 1.1%, Y/Y Gain The Most Since 1991
by:Tom Moeller
|in:Economy in Brief
Summary
The June consumer price index (CPI-U), as reported by the Bureau of Labor Statistics, jumped 1.1% after May's 0.6% rise. The increase, fueled by higher energy prices, was the strongest since October 2005 and it lifted the y/y increase [...]
The June consumer price index (CPI-U), as reported by the Bureau of Labor Statistics, jumped 1.1% after May's 0.6% rise. The increase, fueled by higher energy prices, was the strongest since October 2005 and it lifted the y/y increase to 4.9%, its strongest since 1991. Consensus expectations had been for a 0.7% increase for last month.
Energy prices jumped 6.6% in June after the 4.4% surge during May. Gasoline prices spiked a seasonally adjusted 10.1% and were up 32.8% y/y. (Not seasonally adjusted gasoline prices rose 7.9% m/m last month and they are up another 1.5% so far in July.) Fuel oil prices also were quite strong and surged 8.5% (61.2% y/y). Natural gas & electricity prices rose 1.5% (10.1% y/y).
Food & beverage prices were strong again and jumped 0.7%. That lifted the y/y gain of 5.2% to its fastest since 1990. The three-month rate of increase jumped to an even firmer 8.1%. Prices for cereals & bakery products rose at a 15.2% rate during the last three months while dairy and related products increased at an 11.1% rate. Prices for meats poultry & fish showed upward pressure lately and rose at a 7.8% rate while dairy product prices surged at an 11.1% rate.
Less food & energy consumer prices again matched expectations and rose 0.2%, the same as during May. During the last three months core prices rose at a 2.5% annual rate, the quickest since January.
Core goods prices offset May's slip and nudged up 0.1%. On a the three-month basis prices nudged lower at a 0.1% rate. Prices for new & used motor vehicles rose 0.1% in June but are down at a 0.7% annual rate during the last three months. Apparel prices also ticked up 0.1% and, together with a firm 0.5% gain in April, was enough to lift the three month increase to 1.0%, its firmest since January. Prices for household furnishings & operations were unchanged. They posted a 0.5% uptick during the last three months versus a 0.1% decline during all of last year.
Core services prices posted 0.4% increase, which was the largest rise since January, and it lifted the three month growth rate to 3.6%. The strength again was led by a 3.4% (13.4% y/y) surge in public transportation prices and they are up at a 23.6% rate during the last three months. Medical care services prices rose a reduced 0.3% (4.6% y/y) and shelter prices increased 0.3% (2.6% y/y). Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, rose 0.3% (2.6% y/y) and rents rose 0.4% (3.7% y/y). Education costs rose another 0.5% and here prices rose at an accelerated 5.1% rate during the last three months following a 2.4% rise during 2007.
The chained CPI, which adjusts for shifts in consumption patterns, rose a faster 0.8%. Less food and beverages chained prices rose 0.1%.
PCE and CPI Inflation Differentials: Converting Inflation Forecasts from the Federal Reserve Bank of Kansas City can be fund here.
Has the Behavior of Inflation and Long-term Inflation Expectations Changed? also from the Federal Reserve Bank of Kansas City is available here.
| Consumer Price Index (%) | June | May | June Y/Y | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Total | 1.1 | 0.6 | 4.9 | 2.9 | 3.2 | 3.4 |
| Total less Food & Energy | 0.3 | 0.2 | 2.4 | 2.3 | 2.5 | 2.2 |
| Goods less Food & Energy | 0.1 | -0.1 | 0.2 | -0.4 | 0.2 | 0.5 |
| Services less Energy | 0.4 | 0.3 | 3.3 | 3.4 | 3.4 | 2.8 |
| Energy | 6.6 | 4.4 | 24.4 | 5.6 | 11.0 | 17.0 |
| Food & Beverages | 0.8 | 0.3 | 5.3 | 4.0 | 2.3 | 2.5 |
| Chained CPI: Total (NSA) | 0.8 | 0.6 | 4.2 | 2.5 | 2.9 | 2.9 |
| Total less Food & Energy | 0.1 | 0.0 | 2.1 | 2.0 | 2.2 | 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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