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Economy in Brief

U.S. Consumer Price Inflation Is Minimal
by Tom Moeller  October 22, 2014

The consumer price index gained 0.1% during September (1.7% y/y) following an unrevised 0.2% August decline. The rise matched expectations in the Action Economics Forecast Survey. Consumer prices excluding food and energy also ticked 0.1% higher (1.7% y/y) following no change. Expectations had been for a 0.2% increase.

Weakness in pricing power was paced by a 0.7% decline (-0.6% y/y) in energy prices. Fuel oil prices led the way lower with a 2.1% drop (-3.2% y/y), down for the seventh straight month. Gasoline prices fell 1.0% (-3.6% y/y) on the heels of a 4.1% decline. Electricity prices were off 0.7% (+2.8% y/y) but natural gas prices rebounded 1.6% (5.8% y/y) following four straight months of decline.

Continued strength in food prices offset some of this weakness with a 0.3% increase (3.0% y/y). Meat prices remained strong, posting a 1.2% rise (13.0% y/y). Dairy product prices gained 0.5% (4.9% y/y) but egg prices declined 2.8% (+8.5% y/y). Offsetting this strength was a 0.4% decline (-0.1% y/y) in cereal & bakery product prices. Fruit & vegetable costs ticked 0.1% higher (0.9% y/y) and nonalcoholic beverage costs gained 0.2% (0.2% y/y).

Continuing weak were prices for goods less food and energy, unchanged for the month and down 0.2% y/y. Furniture & bedding prices were off another 0.7% (-3.5% y/y) but appliance costs gained 0.5% (-4.5% y/y). New vehicle prices were unchanged  (0.3% y/y) but used vehicle prices slipped 0.1% (-0.4% y/y). Recreation product prices improved 0.2% (-2.2% y/y) and apparel prices were unchanged (0.5% y/y). Continuing to show strength were educational books & supplies prices which rose 0.3% (4.6% y/y).

Core service prices improved 0.2% (2.4% y/y). Shelter costs (32% of the CPI) rose 0.3% (3.0% y/y) as owners equivalent rent of primary residences increased 0.2% (2.7% y/y). Tuition & other educational costs edged 0.1% higher (3.2% y/y) while medical care services prices also gained 0.1% (1.7% y/y). Public transportation prices slipped 0.1% (-2.2% y/y) while recreation services prices were roughly stable (+1.3% y/y).

The consumer price data is available in Haver's USECON database while detailed figures can be found in CPIDATA. The expectations figure is from Action Economics and is found in the AS1REPNA database.

Consumer Price Index (%) Sep Aug Jul Sep Y/Y 2013 2012 2011
Total 0.1 -0.2 0.1 1.7 1.5 2.1 3.2
Total less Food & Energy 0.1 0.0 0.1 1.7 1.8 2.1 1.7
  Goods less Food & Energy 0.0 -0.1 -0.0 -0.2 -0.0 1.3 1.3
  Services less Energy 0.2 0.0 0.1 2.4 2.4 2.4 1.8
 Food 0.3 0.2 0.4 3.0 1.4 2.6 3.7
 Energy -0.7 -2.6 -0.3 -0.6 -0.7 0.9 15.2
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