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Economy in Brief

U.S. CPI Increase Driven by Energy Costs; Core Weakens
by Tom Moeller  October 18, 2016

The consumer price index increased 0.3% (1.5% y/y) during September following an unrevised 0.2% rise. It was the strongest increase since April, and matched expectations in the Action Economics Forecast Survey. Prices excluding food & energy notched 0.1% higher (2.2% y/y) after a 0.3% increase. A 0.2% rise had been expected.

The strength in the report reflected a 2.9% increase (-2.9% y/y) in energy prices. Gasoline prices jumped 5.8% (-6.5% y/y), the first increase in three months. Fuel oil prices increased 2.4% (-8.5% y/y) while natural gas prices rose 0.8% (2.9% y/y). Electricity costs improved 0.7% (0.1% y/y).

A third straight month of unchanged food prices (-0.3% y/y), after two months of decline, also restrained inflation. A 0.7% fall (-5.0% y/y) in meat prices was accompanied by a 0.3% decline (-0.7% y/y) in fruit & vegetable costs. Egg prices rose 0.3%, but they were one third lower than last year. Dairy product prices gained 0.1% (-2.5% y/y) while cereal & bakery product prices improved 0.1% (-0.5% y/y). Nonalcoholic beverage prices declined 0.4% (-0.9% y/y).

Prices for goods excluding food & energy eased 0.1% (-0.6% y/y), the sixth decline in seven months. Appliance prices were off 1.0% (-3.7% y/y), and apparel prices fell 0.7% (-0.1% y/y). Recreation product prices fell 0.4% (-3.7% y/y). New vehicle prices eased 0.1%, and were unchanged y/y. Home furnishing prices held steady (-2.0% y/y). To the upside were medical care goods prices by 0.6% (5.2% y/y), and education book prices which jumped 0.5% (5.8% y/y).

Non-energy services prices increased 0.2% (3.2% y/y) after a 0.3% gain. Shelter costs increased 0.4% (3.4% y/y), reflecting a 0.4% rise (3.4% y/y) in the owners' equivalent rent of primary residences. Primary residence rental costs rose 0.3% (3.7% y/y). Public transportation prices gained 0.2%, but were down 0.8% y/y. Tuition costs increased 0.2% (2.3% y/y) while recreation services prices improved 0.1% (3.1% 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, All Urban Consumers (%) Sep Aug Jul Sep Y/Y 2015 2014 2013
Total 0.3 0.2 -0.0 1.5 0.1 1.6 1.5
Total less Food & Energy 0.1 0.3 0.1 2.2 1.8 1.7 1.8
  Goods less Food & Energy -0.1 0.1 -0.1 -0.6 -0.5 -0.3 -0.0
  Services less Energy 0.2 0.3 0.2 3.2 2.6 2.5 2.4
 Food 0.0 -0.0 -0.0 -0.3 1.9 2.4 1.4
 Energy 2.9 -0.0 -1.6 -2.9 -16.7 -0.3 -0.7
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