Global| Nov 16 2011U.S. CPI Declines With Energy; Core Is Stable & Low
by:Tom Moeller
|in:Economy in Brief
Summary
The ability to raise prices in this modest economic growth environment is virtually nonexistent. The October Consumer Price Index slipped 0.1% following three months of elevated increase. The decline compared with expectations for no [...]
The ability to raise prices in this modest economic growth environment is virtually nonexistent. The October Consumer Price Index slipped 0.1% following three months of elevated increase. The decline compared with expectations for no change. Consumer prices less food & energy also were tame, posting a second consecutive 0.1% uptick. The gain matched expectations. Over several months, price inflation indeed remained subdued. On a three-month basis, the CPI is up at a 2.4% annual rate and is lower than its April peak of 6.2%. The 1.8% increase in core prices is down as well from its 3.1% July peak.
A 2.0% decline in energy prices led the CPI lower last month. Gasoline prices fell 3.1% (+23.5% y/y) and reversed two months of increase. Fuel oil prices edged up a not seasonally adjusted 0.1% (21.2% y/y) following five months of decline. Food & beverages rose 0.2%, the easiest increase in four months. Nevertheless, the 4.7% y/y gain remained the strongest since early-2009. Strength versus last year continued in cereal products (9.8%) and dairy products (9.1% y/y).
For goods alone, core prices fell for the second consecutive month. The 0.1% dip lessened the three-month gain to 0.2% (AR) from its June peak of 5.9%. Apparel prices rose 0.4% (4.2% y/y) after the 1.1% September drop, while motor vehicle prices fell 0.4% (+3.4% y/y). Household furnishings & operations prices ticked up 0.1% (0.6% y/y).
Core service prices rose 0.2% (2.1% y/y) for the fourth straight month. Education costs rose 0.4% (4.7% y/y) while public transportation costs were essentially unchanged (+7.0% y/y). Medical care service prices rose 0.5% (3.1% y/y). Shelter costs, which are 32% of the CPI, rose 0.2% but the y/y change edged up to 1.8% versus its 0.4% dip last year. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, edged up 0.2%. The 1.6% y/y increase is up from its lowest of no-change for all of last year.
The chained CPI, which adjusts for shifts in consumption patterns, rose 0.1% (3.7% y/y). Chained prices less food & energy rose 0.2% m/m and by 1.8% 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 the AS1REPNA database.
| Consumer Price Index (%) | Oct | Sep | Aug | Oct Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | -0.1 | 0.3 | 0.4 | 3.6 | 1.6 | -0.3 | 3.8 |
| Total less Food & Energy | 0.1 | 0.1 | 0.2 | 2.1 | 1.0 | 1.7 | 2.3 |
| Goods less Food & Energy | -0.1 | -0.2 | 0.4 | 2.1 | 1.1 | 1.3 | 0.1 |
| Services less Energy | 0.2 | 0.2 | 0.2 | 2.1 | 0.9 | 1.9 | 3.1 |
| Food & Beverages | 0.1 | 0.4 | 0.5 | 4.5 | 0.8 | 1.9 | 5.4 |
| Energy | -2.0 | 2.0 | 1.2 | 14.3 | 9.6 | -18.2 | 13.7 |
| Chained CPI: Total (NSA) | -0.2 | 0.1 | 0.3 | 3.4 | 1.5 | -0.1 | 3.7 |
| Total less Food & Energy | 0.2 | 0.2 | 0.3 | 1.9 | 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.
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