U.S. Consumer Price Gain Accelerates in March
by:Tom Moeller
|in:Economy in Brief
Summary
- Twelve-month gain is strongest since January 1982.
- Energy prices soar and food prices remain strong.
- Services prices strengthen, but core goods prices fall.
The Consumer Price Index gained 1.2% (8.5% y/y) last month after rising 0.8% in February. It was the largest monthly increase since October 2005. The increase matched expectations in the Action Economics Forecast Survey. Prices excluding food & energy rose 0.3% last month (6.5% y/y), the weakest monthly increase in six months. It compared to a 0.5% expected gain.
Energy prices were strong in March, surging 11.0% (32.0% y/y). Gasoline prices jumped 18.3% (48.0% y/y) to a record high. Fuel oil prices surged 22.3% (70.1% y/y). The cost of electricity strengthened 2.2% (11.1% y/y), while natural gas prices rose 0.6% (21.6% y/y).
Food price inflation remained strong last month and posted a second consecutive 1.0% gain (8.8% y/y). Egg prices rose 1.9% (11.2% y/y) while fruit & vegetable prices jumped 1.5% (8.5% y/y). Cereal & bakery product prices also gained 1.5% (9.4% y/y) while dairy product costs strengthened 1.2% (7.0% y/y). Meat, poultry & fish prices gained 0.9% (13.8% y/y).
Services prices rose 0.6% (4.7% y/y), the quickest increase since September 1990. The cost of public transportation surged 7.1% (14.9% y/y), twice the elevated February increase. Hotel prices strengthened 3.3% (25.1% y/y) while the owners equivalent rent of primary residences gained 0.4% (4.5% y/y). Rents of primary residences rose 0.4% (4.4% y/y). The cost of medical care services rose 0.6% (2.9% y/y). Recreation services prices rose 0.5% (4.8% y/y). Education prices eased 0.1% (+1.6% y/y).
Goods prices excluding food & energy declined 0.4% (+11.7% y/y) in March. Price changes within categories were mixed. Used car & truck prices slid 3.8% (+35.3% y/y). Education & communication product prices fell 0.6% (+1.3% y/y) while recreation product prices eased 0.1% (+4.7% y/y). To the upside, household appliance prices surged 1.5% (8.0% y/y) while furnishings prices rose 1.0% (10.8% y/y). Apparel prices increased 0.6% (6.8% y/y). New vehicle prices edged up 0.2% (12.5% y/y).
The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.
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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