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Economy in Brief

U.S. CPI Increase Restrained by Lower Goods Prices Last Month
by Tom Moeller  July 15, 2016

Strengthening energy prices continue to be offset by moderate inflation elsewhere. The June Consumer Price Index increased 0.2% (1.0% y/y), the same as during the prior month. These gains follow of a 0.4% April rise. A 0.3% increase had been expected in the Action Economics Forecast Survey. Prices excluding food & energy also rose a stable and expected 0.2%. The y/y increase strengthened, however, to 2.3%, up from 1.6% early last year.

Energy prices increased 1.3% (-9.4% y/y) as gasoline costs strengthened 3.3%, up 16.6% from February. Fuel oil prices rose 3.3% (NSA, -19.6% y/y). Electricity prices fell 0.5% (-1.8% y/y) while natural gas costs eased 0.4% (-5.0% y/y).

Declines in non-energy goods prices were widespread last month. Used car & truck prices fell 1.1% (-3.1% y/y), down for the fourth straight month. Recreation product prices declined 0.9% (-3.4% y/y) while apparel prices fell 0.4% (+0.4% y/y), off for the third month in the last four. Furniture costs were 0.3% lower (-2.1% y/y), and they've been falling since September. New vehicle prices eased 0.2% (-0.4% y/y), down for the fourth straight month. Moving higher were prices for medical care products by 1.1% (3.2% y/y) after a 0.2% dip.

Services prices strengthened 0.3%, and the y/y rise of 3.2% was up from a 0.9% gain during all of 2010. Shelter prices increased 0.3% (3.5% y/y). The owners equivalent rent of primary residences also increased 0.3%, with the 3.2% y/y gain up from little change in 2010. Medical care services prices rose 0.2% (3.8% y/y) following a 0.5% rise. Recreation services strengthened 0.6%, the 3.3% y/y increase up from 1.8% in 2014. Tuition costs improved 0.4%, but the 2.9% y/y increase was down from its 7.1% peak in 2004. Transportation services prices rose a steady 0.3% (3.0% y/y).

Food prices eased 0.1% (+0.3% y/y) following a 0.2% decline. Egg prices were off 5.7% (-26.9% y/y) and meat prices eased 0.3% (3.9% y/y). Dairy product prices fell 0.3% (-2.2% y/y) while fruit & vegetable prices eased 0.1% (-2.2% y/y). Nonalcoholic beverage prices declined 0.7% (-0.5% y/y). Cereal & bakery product prices improved 0.1% (-0.4% 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.

Global Demographic Trends Shape Policy Environment from the Federal Reserve Bank of Dallas is available here.

Consumer Price Index, All Urban Consumers (%) Jun May Apr Jun Y/Y 2015 2014 2013
Total 0.2 0.2 0.4 1.0 0.1 1.6 1.5
Total less Food & Energy 0.2 0.2 0.2 2.3 1.8 1.7 1.8
  Goods less Food & Energy -0.2 -0.2 -0.1 -0.6 -0.5 -0.3 -0.0
  Services less Energy 0.3 0.3 0.3 3.2 2.6 2.5 2.4
 Food -0.1 -0.2 0.2 0.3 1.9 2.4 1.4
 Energy 1.3 1.2 3.4 -9.4 -16.7 -0.3 -0.7
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