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Economy in Brief

U.S. Consumer Prices Remain Unchanged; Core Prices Heat Up
by Tom Moeller  November 20, 2014

The consumer price index held steady during October (1.7% y/y) following an unrevised 0.1% September uptick. The figure compared to an expected 0.1% decline in the Action Economics Forecast Survey. Consumer prices excluding food and energy increased 0.2% (1.8% y/y), the strongest increase since May. Expectations had been for a 0.1% rise.

A 1.9% decline (-1.6% y/y) in energy prices held back the gain in consumer prices last month. Fuel oil prices declined 4.0% (-6.5% y/y), down for the eighth straight month. Gasoline prices fell 3.0% (-5.0% y/y), off for a fourth straight month. Natural gas prices declined 2.7% (+3.4% y/y) but electricity costs gained 0.5% (3.1% y/y).

Food prices provided minimal upward pricing pressure with a 0.1% uptick (3.1% y/y). Meat prices pulled back 0.2% (+12.5% y/y) and egg prices fell 0.4% (+6.7% y/y). Offsetting these declines was a 0.5% rise (5.6% y/y) in dairy product prices. Cereal & bakery product prices also increased 0.3% (0.4% y/y) and fruit & vegetable costs improved 0.9% (2.0% y/y).

Core service prices increased 0.3% (2.5% y/y), the strongest rise since May. Transportation services prices paced the increase, prompted by a 1.7% rise (-1.8% y/y) in the cost of public transportation. Education costs gained 0.5% (3.3% y/y), recreation services prices increased 0.4% (1.5% y/y) and medical care services prices rose 0.2% (1.9% y/y). Shelter costs (32% of the CPI) rose 0.2% (3.1% y/y) as owners equivalent rent of primary residences increased 0.2% (2.7% y/y).

Continuing weak were prices for goods less food and energy; roughly unchanged for a fourth straight month (-0.2% y/y. Apparel prices fell 0.2% (+0.6% y/y) and transportation product prices slipped 0.1% (-0.2% y/y). Continuing to show strength were educational books & supplies prices which rose 0.8% (4.5% y/y). Also firm were furniture & bedding prices, up 0.7% (-2.7% y/y), and appliance costs which rose 0.2% (-4.2% y/y). Recreation product prices remained steady (-2.2% 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.

The minutes to the latest FOMC meeting are available here.

Consumer Price Index (%) Oct Sep Aug Oct Y/Y 2013 2012 2011
Total 0.0 0.1 -0.2 1.7 1.5 2.1 3.2
Total less Food & Energy 0.2 0.1 0.0 1.8 1.8 2.1 1.7
  Goods less Food & Energy 0.0 0.0 -0.1 -0.2 -0.0 1.3 1.3
  Services less Energy 0.3 0.2 0.0 2.5 2.4 2.4 1.8
 Food 0.1 0.3 0.2 3.1 1.4 2.6 3.7
 Energy -1.9 -0.7 -2.6 -1.6 -0.7 0.9 15.2
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