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Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller November 16, 2005
The 0.2% rise in the consumer price index (CPI-U) last month was stronger than Consensus expectations for no change in prices following the huge 1.2% spurt in September.
Though energy prices declined, the fall was limited to 0.2% due to a 14.0% (45.3% y/y) surge in natural gas prices and a 0.9% (35.9% y/y) gain in fuel oil prices. These gains were offset by gasoline prices which moved lower by 4.5% (+37.0% y/y) and in November have declined roughly another 15% m/m to $2.30 per gallon in the latest week. 
Prices less food & energy rose 0.2%, twice the September increase, but the increase matched Consensus expectations. Core goods prices were unchanged as 0.5% increases in prices for medical commodities (2.6% y/y) and new vehicles (0.9% y/y) were offset by m/m declines in prices for appliances (+2.5% y/y), carpets (-3.5% y/y) and other household equipment (-6.5% y/y). Apparel prices also fell for the sixth month this year (-0.4% m/m, -1.1% y/y) and tobacco prices dropped 0.1% (5.6% y/y).
Core services prices rose 0.3% as shelter prices jumped 0.5% (2.3% y/y) and medical care services prices also rose 0.5% (4.6% y/y). Public transportation prices ballooned 1.4% (7.8% y/y) while school tuition costs rose 0.2% (6.2% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases rose 0.3% and less food & energy chain prices rose 0.4%.
Understanding the Inflation Targeting Debate from the Federal Reserve Bank of St. Louis is available here.
| Consumer Price Index | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Total | 0.2% | 1.2% | 4.3% | 2.7% | 2.3% | 1.6% |
| Total less Food & Energy | 0.2% | 0.1% | 2.0% | 1.8% | 1.5% | 2.3% |
| Goods less Food & Energy | 0.0% | 0.1% | 0.4% | -0.9% | -2.0% | -1.1% |
| Services less Energy | 0.3% | 0.1% | 2.7% | 2.8% | 2.9% | 3.8% |
| Energy | -0.2% | 12.0% | 29.6% | 10.9% | 12.2% | -5.9% |
| Food | 0.3% | 0.3% | 2.2% | 3.4% | 2.1% | 1.8% |
| Chained CPI: Total (NSA) | 0.3% | 0.8% | 3.3% | 2.3% | 2.0% | 1.3% |
| Total less Food & Energy | 0.4% | 0.2% | 1.7% | 1.5% | 1.1% | 1.9% |
