Global| Jun 15 2011U.S. CPI Increase Moderates in May; Core Picks Up
by:Tom Moeller
|in:Economy in Brief
Summary
The good news about today's reported 0.2% increase in the May CPI was that it was the smallest monthly gain since November. The discouraging part of the report was that less food & energy, the 0.3% increase was the firmest since 2008. [...]
The good news about today's reported 0.2% increase in the May CPI was that it was the smallest monthly gain since November. The discouraging part of the report was that less food & energy, the 0.3% increase was the firmest since 2008. The increases compared to expectations for a 0.1% uptick in the total and a 0.2% rise in the core. On a three-month basis, prices rose at a 4.6% annual rate, also the firmest since mid-2008. Core price inflation picked up as well. The CPI less food & energy rose 0.3% and 2.5% on a three-month basis, the strongest since April, 2009.
Energy prices overall fell 1.0% last month as gasoline prices dropped 2.0% (+36.9% y/y). Food & beverage costs rose another 0.4% (3.4% y/y), the strongest increase since April 2009. The gain was raised by a 1.5% rise (8.5% y/y) in meats, poultry & fish and a 0.8% increase (6.9% y/y) in dairy prices.
For goods alone, core prices rose an accelerated 0.5% led by a 1.2% increase (1.0% y/y) in apparel and a 1.0% rise (3.1% y/y) in vehicle prices.
Core service prices gained 0.2% (1.6% y/y) last month. Education costs rose 0.4% (3.9% y/y) while medical care service prices rose another 0.3% (3.0% y/y). Public transportation costs fell 0.5% (+7.2% y/y). Shelter costs, which are 32% of the CPI, rose 0.2% after seven consecutive months of 0.1% increase and the y/y change rose to 1.1%. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, again nudged up 0.1% (0.9% y/y). The reading remained nearly the weakest since the series' start in 1983.
The chained CPI, which adjusts for shifts in consumption patterns, jumped another 0.6% and 3.3% year-to-year. Chained prices less food & energy increased 0.2% m/m and by 1.3% 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.
Where is an Oil Shock? from the Federal Reserve Bank of St. Louis and it is available here.
| Consumer Price Index (%) | May | Apr | Mar | May Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Total | 0.2 | 0.4 | 0.5 | 3.4 | 1.6 | -0.3 | 3.8 |
| Total less Food & Energy | 0.3 | 0.2 | 0.1 | 1.5 | 1.0 | 1.7 | 2.3 |
| Goods less Food & Energy | 0.5 | 0.4 | 0.1 | 1.2 | 1.1 | 1.3 | 0.1 |
| Services less Energy | 0.2 | 0.1 | 0.2 | 1.6 | 0.9 | 1.9 | 3.1 |
| Energy | -1.0 | 2.2 | 3.5 | 20.7 | 9.6 | -18.2 | 13.7 |
| Food & Beverages | 0.4 | 0.4 | 0.7 | 3.4 | 0.8 | 1.9 | 5.4 |
| Chained CPI: Total (NSA) | 0.4 | 0.6 | 0.9 | 3.3 | 1.5 | -0.1 | 3.7 |
| Total less Food & Energy | 0.2 | 0.2 | 0.3 | 1.3 | 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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