Global| Aug 18 2011U.S. CPI Gain Is Surprisingly Strong; Core Increase Eases
by:Tom Moeller
|in:Economy in Brief
Summary
Price inflation accelerated last month, but its makeup was somewhat mixed. The overall CPI gained 0.5% following June's 0.2% decline. A 0.2% increase was expected. Despite the July strength, the three-month gain in prices eased to [...]
Price inflation accelerated last month, but its makeup was somewhat
mixed. The overall CPI gained 0.5% following June's 0.2% decline. A 0.2%
increase was expected. Despite the July strength, the three-month gain in
prices eased to 1.8% (AR), down sharply from its 6.2% April peak.
Excluding food and beverages, prices gained an expected 0.2% last month
after a 0.3% June rise. On a three-month basis, however, price gains
continued higher to a 3.1% rate, the highest since early-2008.
Higher energy prices led last month's strength in the CPI with a 2.8% rise. Gasoline prices rose 4.7% (33.6% y/y) following two months of decline. Food & beverages were again strong. However, the 0.4% m/m rise still left the three-month gain lower at 3.8%. Dairy product prices jumped 1.2% (7.9% y/y) and prices of meats, poultry & fish rose a firm 0.5% (7.4% y/y). These gains were offset by a 0.1% decline in cereal prices (4.3% y/y).
For goods alone, core prices rose 0.3% after two months of 0.5% increase. Apparel prices firmed for the third straight month and posted a 1.2% increase (3.0% y/y). This strength was offset, however, by a 0.1% uptick in vehicle prices (3.9% y/y). Furniture prices were unchanged for the second month. They're essentially unchanged y/y after last year's 2.5% fall.
Core service prices rose 0.2% (1.7 y/y) last month. Education costs rose 0.7% (4.0% y/y) but that y/y gain is below the 6%-to-7% increases in the early 2000s. Medical care service prices rose 0.3% (3.2% y/y) for the fourth straight month. Public transportation costs slipped 0.2% (+6.0% y/y) for the third consecutive month of decline. Shelter costs, which are 32% of the CPI, rose 0.3% and the y/y change improved further to 1.4%. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, rose a strengthened 0.3% (1.2% y/y).
The chained CPI, which adjusts for shifts in consumption patterns, ticked up 0.1% (3.5% y/y). Chained prices less food & energy also rose 0.1% m/m and by 1.6% 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 (%) | Jul | Jun | May | Jul Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | 0.5 | -0.2 | 0.2 | 3.6 | 1.6 | -0.3 | 3.8 |
| Total less Food & Energy | 0.2 | 0.3 | 0.3 | 1.8 | 1.0 | 1.7 | 2.3 |
| Goods less Food & Energy | 0.3 | 0.5 | 0.5 | 1.8 | 1.1 | 1.3 | 0.1 |
| Services less Energy | 0.2 | 0.1 | 0.2 | 1.7 | 0.9 | 1.9 | 3.1 |
| Energy | 2.8 | -4.4 | -1.0 | 19.0 | 9.6 | -18.2 | 13.7 |
| Food & Beverages | 0.4 | 0.2 | 0.4 | 4.0 | 0.8 | 1.9 | 5.4 |
| Chained CPI: Total (NSA) | 0.1 | -0.1 | 0.4 | 3.5 | 1.5 | -0.1 | 3.7 |
| Total less Food & Energy | 0.1 | 0.1 | 0.2 | 1.6 | 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.
