Global| Jul 15 2011U.S. CPI Declines; Core Increase Is Stable M/M But Trend Increases
by:Tom Moeller
|in:Economy in Brief
Summary
The inflation picture brightened slightly last month. The overall CPI declined 0.2%, the first decline in twelve months. The drop compared to Consensus expectations for a 0.1% slip. On a three-month basis prices rose at a moderated [...]
The inflation picture brightened slightly last month. The overall CPI
declined 0.2%, the first decline in twelve months. The drop compared to
Consensus expectations for a 0.1% slip. On a three-month basis prices rose
at a moderated 1.5% annual rate. However, there was some reason for worry
within the report. The trend in core inflation picked up as prices less
food & energy rose another 0.3% versus an expected 0.2%. On a three-month
basis, the 2.9% gain (AR) was the strongest in three years.
Lower energy prices led the moderation in the overall June CPI with a 4.4% decline. Gasoline prices fell 6.8% (+35.6% y/y). Food & beverage costs rose a moderated 0.2% (3.6% y/y). Prices of meats, poultry & fish fell 0.4% (+7.2% y/y) following four consecutive months of greater than 1.0% rise.
For goods alone, core prices rose 0.5% for the second consecutive month. Strength in apparel prices led the gain with a 1.9% increase (1.9% y/y) after May's 1.0% rise. Vehicle prices rose 1.0% (3.9% y/y), also for the second month. Furniture prices were essentially unchanged but the y/y decline moderated to -0.4% from -3.1% one year ago.
Core service prices ticked up 0.1% (1.6 y/y) last month. Education costs rose 0.3% (3.8% y/y) while medical care service prices rose 0.3% (2.9% y/y) for the third straight month. Public transportation costs fell 2.2% (+5.6% y/y). Shelter costs, which are 32% of the CPI, rose 0.2% for the second month but the y/y change improved to 1.2%. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, rose a strengthened 0.2% (1.0% y/y).
The chained CPI, which adjusts for shifts in consumption patterns, slipped 0.1% (+3.4% y/y). Chained prices less food & energy ticked up 0.1% m/m and by 1.4% y/y.
The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database. The expectations figure is the AS1REPNA database.
Macroeconomic Policy and Labor Markets: Lessons From Dale Mortensen's Research from the Federal Reserve Bank of Chicago can be found here.
| Consumer Price Index (%) | Jun | May | Apr | Jun Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | -0.2 | 0.2 | 0.4 | 3.6 | 1.6 | -0.3 | 3.8 |
| Total less Food & Energy | 0.3 | 0.3 | 0.2 | 1.6 | 1.0 | 1.7 | 2.3 |
| Goods less Food & Energy | 0.5 | 0.5 | 0.4 | 1.6 | 1.1 | 1.3 | 0.1 |
| Services less Energy | 0.1 | 0.2 | 0.1 | 1.6 | 0.9 | 1.9 | 3.1 |
| Energy | -4.4 | -1.0 | 2.2 | 19.6 | 9.6 | -18.2 | 13.7 |
| Food & Beverages | 0.2 | 0.4 | 0.4 | 3.6 | 0.8 | 1.9 | 5.4 |
| Chained CPI: Total (NSA) | -0.1 | 0.4 | 0.6 | 3.4 | 1.5 | -0.1 | 3.7 |
| Total less Food & Energy | 0.1 | 0.2 | 0.2 | 1.4 | 0.7 | 1.5 | 2.0 |
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.
More Economy in Brief
