Global| Dec 15 2010U.S. CPI Inches Higher
by:Tom Moeller
|in:Economy in Brief
Summary
Heightened competition continued to restrain pricing power last month. That again was clear in the November report on the Consumer Price Index which ticked up only 0.1% after a 0.2% rise during October. The gain was lower than [...]
Heightened competition continued to restrain pricing power last month.
That again was clear in the November report on the Consumer Price Index which
ticked up only 0.1% after a 0.2% rise during October. The gain was lower than
Consensus expectations for a 0.2% rise. During the last twelve months, the CPI
rose 1.1% following the 0.3% decline during all of last year.
Core consumer pricing power remained weak as prices excluding foods & fuel inched up 0.1% following three months of being unchanged. The rise met expectations. That left the y/y gain at 0.7%, near the least since the series began in 1957. Core goods prices fell 0.1%, down for the third consecutive month and 0.2% y/y, despite a 5.0% 12-month rise in tobacco prices. New and used motor vehicle prices slipped for the third straight month but they've risen 1.0% y/y while prices of home furnishings & operation have fallen 2.5% since last year. Apparel prices rose 0.2% (-0.8% y/y) after three months of decline.
Pricing power for core services also showed little strength this year. Prices rose just 0.2% last month and 1.0% y/y. To the upside, public transportation costs led last month's gain and surged 2.1% (4.4% y/y) after last year's 5.6% decline. Medical care was another area of strength posting a 0.1% November increase and 3.4% y/y. Finally, education costs also were strong and rose 3.8% y/y after a 5.3% increase last year. Lower shelter costs, which are 32% of the CPI, offset this strength and fell 0.1% y/y. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, ticked up 0.2% after a 1.7% gain in 2009. These latest readings are the weakest since the series' start in 1983.
Energy prices were also restrained last month. They rose just 0.2% during November and 3.9% y/y. A 0.7% increase (7.3% y/y) in gasoline prices was accompanied by a 0.7% decline (-0.9% y/y) in natural gas & electricity prices. Fuel oil prices rose 3.5% (NSA) last month and 10.0% y/y. Food & beverage prices rose 0.2% last month and 1.5% y/y. Strength in meat, poultry, fish & eggs (5.9% y/y) and dairy products (3.8% y/y) has been offset by stable fruit & vegetable and cereal prices. The cost of eating out rose 1.3% y/y after a 3.5% 2009 gain.
The chained CPI, which adjusts for shifts in consumption patterns, was unchanged and up 1.0% year-to-year. Chained prices less food & energy slipped m/m and rose 0.5% 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 (%) | Nov | Oct | Sept | Nov Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | 0.1 | 0.2 | 0.1 | 1.1 | -0.3 | 3.8 | 2.9 |
| Total less Food & Energy | 0.1 | -0.0 | 0.0 | 0.7 | 1.7 | 2.3 | 2.3 |
| Goods less Food & Energy | -0.1 | -0.2 | -0.2 | -0.2 | 1.3 | 0.1 | -0.4 |
| Services less Energy | 0.2 | 0.1 | 0.1 | 1.0 | 1.9 | 3.1 | 3.4 |
| Energy | 0.2 | 2.6 | 0.7 | 3.9 | -18.1 | 13.7 | 5.6 |
| Food & Beverages | 0.2 | 0.1 | 0.3 | 1.5 | 1.9 | 5.4 | 3.9 |
| Chained CPI: Total (NSA) | 0.0 | 0.2 | 0.1 | 1.0 | -0.1 | 3.7 | 2.5 |
| Total less Food & Energy | -0.0 | 0.1 | 0.1 | 0.5 | 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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