Global| Aug 13 2010U.S. CPI Remains Tame With Across-the-Board Weakness
by:Tom Moeller
|in:Economy in Brief
Summary
Not-with-standing a moderate blip in energy prices, consumer price inflation remained under control last month. The July Consumer Price Index increased 0.3% (1.3% y/y) following three consecutive months of slight decline. During the [...]
Not-with-standing a moderate blip in energy prices, consumer price inflation
remained under control last month. The July Consumer Price Index increased 0.3%
(1.3% y/y) following three consecutive months of slight decline. During the
first seven months of this year prices rose at a 0.3% annual rate. The latest
figure was a bit higher than Consensus expectations for a 0.2% increase.
First and foremost, a 2.6% rise in energy prices reversed the June drop. The latest was driven by a 4.6% gain (7.4% y/y) in gasoline prices after five consecutive months of decline. Natural gas & electricity prices also rose 0.8% (1.8% y/y) but fuel oil prices fell 1.6% (+13.5% y/y). Food & beverage prices also were tame and roughly unchanged for the third consecutive month. Fruit & vegetable prices fell another 1.9% (-1.8% y/y) though prices for meats, poultry, fish & eggs rose 0.3% (3.6% y/y) and dairy prices rose 0.5% (3.0% y/y). The cost of eating out remained tame in this subdued spending environment and slipped modestly (+1.1% y/y).
Core consumer pricing power also remained under wraps. Another 0.2% increase in prices less food & energy left them up just 1.0% y/y, nearly the weakest since the early-1960s. A 0.1% July uptick had been expected. Year-to-date prices rose at a 0.7% annual rate. Core goods prices again rose 0.2% m/m (1.0% y/y) and at a 0.3% annual rate so far in 2010. Pricing strength was led last month by a 1.6% increase (7.4% y/y) in tobacco prices. Apparel prices increased 0.6% (-0.2% y/y) while prices of home furnishings &operation slipped 0.1% (-3.1% y/y). New & used motor vehicles prices again increased 0.3% (4.3% y/y) though most of that twelve-month strength occurred at the end of last year.
Core services prices rose 0.1% (1.0% y/y) for the fifth month in the last six. Another 0.4% gain (4.8% y/y) in education costs led the increase. Shelter costs rose 0.1% (-0.4% y/y) as owners equivalent rent of primary residences, a measure not equivalent to other house price measures, also ticked 0.1% higher (-0.2% y/y). The slight y/y decline in this measure was the weakest reading since the series' start in 1983. Medical care services prices slipped marginally (+3.2% y/y).
The chained CPI, which adjusts for shifts in consumption patterns, was about unchanged m/m and rose 1.0% year-to-year. Chained prices less food & energy also were about unchanged and up only 0.6% y/y.
The consumer price data is available in Haver's USECON database while detailed figures can be found in the CPIDATA database.
Are some prices in the CPI more forward looking than others? We think so. from the Federal Reserve Bank of Cleveland can be found here.
| Consumer Price Index (%) | July | June | May | July Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total | 0.3 | -0.1 | -0.2 | 1.3 | -0.3 | 3.8 | 2.9 |
| Total less Food & Energy | 0.1 | 0.2 | 0.1 | 1.0 | 1.7 | 2.3 | 2.3 |
| Goods less Food & Energy | 0.2 | 0.2 | 0.1 | 1.0 | 1.3 | 0.1 | -0.4 |
| Services less Energy | 0.1 | 0.1 | 0.1 | 1.0 | 1.9 | 3.1 | 3.4 |
| Energy | 2.6 | -2.9 | -2.9 | 5.2 | -18.1 | 13.7 | 5.6 |
| Food & Beverages | -0.0 | -0.0 | 0.0 | 0.9 | 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 | 0.0 | -0.0 | 0.6 | 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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