Global| Jul 16 2010U.S. CPI: Broad-Based Declines For Third Straight Month
by:Tom Moeller
|in:Economy in Brief
Summary
Broad-based weakness in pricing power continues to accompany moderate U.S. economic growth. The June Consumer Price Index fell 0.1% (+1.1% y/y) for the third consecutive monthly decline. During the first six months of this year prices [...]
Broad-based weakness in pricing power continues to accompany moderate U.S.
economic growth. The June Consumer Price Index fell 0.1% (+1.1% y/y) for the
third consecutive monthly decline. During the first six months of this year
prices fell at a 0.3% annual rate. The latest figure fell short of Consensus
expectations for a 0.1% increase.
A 2.9% drop in energy prices was behind much of last month's total decline. It was the fifth consecutive monthly slip and the latest was powered by a 4.5% decline (+3.9% y/y) in gasoline prices. Fuel oil prices also fell 2.6% (+14.1% y/y) while natural gas & electricity prices dropped 1.6% (+0.8% y/y). Food & beverage prices also were weak posting little change for the second straight month. A 1.3% decline (-0.2 y/y) in fruit & vegetable prices offset a 1.0% rise (2.0% y/y) in meats, poultry, fish & egg prices. The cost of eating out rose 0.1%(1.2% y/y) for the second month.
Core consumer pricing power picked up minimally. A 0.2% increase in prices less food & energy followed seven consecutive months of little change. A 0.1% uptick had been expected. Year-to-date prices rose at a 0.6% annual rate. Core goods prices rose 0.2% (1.0% y/y) for the first solid increase this year. A 1.0% increase (8.0% y/y) in tobacco prices led the gain. Apparel prices increased 0.8% (-0.4% y/y) while prices of home furnishings & operation declined by 0.4% (-3.1% y/y). New & used motor vehicles prices increased 0.3% (+4.4% y/y).
Core services prices rose 0.1% (1.0% y/y) for the fourth month in the last five. Public transportation costs fell 0.5% (+10.9% y/y) after two months of sharp increase. Education prices rose 0.4% (4.8% y/y) following years of 5-6% annual increase while medical care services prices increased a firm 0.4% (3.5% y/y). Weakness in the housing market left shelter prices up just 0.1% but down 0.5% y/y. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, ticked 0.1% higher (-0.2% y/y). The slight y/y decline in this measure was the weakest reading since the series' start in 1983. Medical care services prices again rose 0.3% (3.7% y/y).
The chained CPI, which adjusts for shifts in consumption patterns, slipped last month and rose 0.8% year-to-year. Chained prices less food & energy were unchanged, up only 0.6% y/y.
The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database.
| Consumer Price Index (%) | June | May | April | June Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | -0.1 | -0.2 | -0.1 | 1.1 | -0.3 | 3.8 | 2.9 |
| Total less Food & Energy | 0.2 | 0.1 | 0.0 | 1.0 | 1.7 | 2.3 | 2.3 |
| Goods less Food & Energy | 0.2 | 0.1 | -0.3 | 1.0 | 1.3 | 0.1 | -0.4 |
| Services less Energy | 0.1 | 0.1 | 0.2 | 1.0 | 1.9 | 3.1 | 3.4 |
| Energy | -2.9 | -2.9 | -1.4 | 3.0 | -18.1 | 13.7 | 5.6 |
| Food & Beverages | -0.0 | 0.0 | 0.2 | 0.7 | 1.9 | 5.4 | 3.9 |
| Chained CPI: Total (NSA) | -0.2 | 0.1 | 0.2 | 0.8 | -0.1 | 3.7 | 2.5 |
| Total less Food & Energy | 0.0 | -0.0 | 0.0 | 0.6 | 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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