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Economy in Brief

U.S. CPI Gain Raised Again by Energy Prices; Core Prices Increase Minimally
by Tom Moeller  November 17, 2016

The consumer price index increased 0.4% (1.6% y/y) during October following an unrevised 0.3% rise. It was the strongest increase in six months, and matched expectations in the Action Economics Forecast Survey. Prices excluding food & energy improved 0.1% (2.1% y/y), the same as in September. A 0.2% rise had been expected.

Stronger energy prices raised the overall figure with a 3.5% rise. The 0.1% y/y price decline compared to a 19.9% y/y shortfall in January of last year. Gasoline prices jumped 7.0% (-0.9% y/y). Fuel oil prices increased 5.9% (-2.1% y/y) while natural gas prices rose 0.9% (4.8% y/y). Electricity costs improved 0.4% (0.4% y/y).

Non-energy services costs also provided strength to the overall price level with a 0.2% rise (3.0% y/y), the same as in September. Tuition costs increased 0.5% (2.5% y/y) after a 0.2% gain. Shelter costs improved 0.4% (3.5% y/y) for a second straight month, reflecting a 1.6% jump (4.4% y/y) in the cost of lodging away from home. Primary residence rental costs increased 0.4% (3.8% y/y) versus a 0.3% average so far this year. The owner's equivalent rent of primary residence measure rose 0.3%, and by an accelerated 3.4% y/y. Medical care services costs fell slightly (+4.1% y/y) as did recreation services costs (+2.8% y/y). Public transportation prices declined 1.6%, and were down 2.7% y/y.

Prices for goods excluding food & energy improved 0.1% (-0.5% y/y) after a 0.1% dip. On the strong side were apparel prices which rose 0.3% (0.7% y/y) following a 0.7% decline. New vehicle costs improved 0.2% (0.3% y/y) following two months of little change. Medical care product prices increased 0.1% (5.0% y/y) following a 0.6% jump. Educational books & supplies also improved 0.1% (5.6% y/y) after a 0.5% jump. Household furnishings prices remained unchanged (-1.8% y/y) for a second month. Weakening were appliance prices, off 1.0% (-3.7% y/y), and recreation product prices which fell 0.4% for a second straight month (-4.0% y/y).

Food prices were little changed for the fourth straight month (-0.4% y/y). A 0.6% fall (-3.8% y/y) in meat, poultry & fish prices was accompanied by a 1.2% decline (-35.5% y/y) in fresh egg prices. Fruit & vegetable costs improved 0.2% (-0.8% y/y). Dairy product prices gained 0.3% (-1.7% y/y) while cereal & bakery product prices remained steady (-1.2% y/y). Nonalcoholic beverage prices declined 0.4% (-1.3% y/y) for a second straight month. The cost of eating out rose 2.4% 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.

The Economic Outlook is the title of today's speech by Fed Chair Janet L. Yellen and it can be found here.

Consumer Price Index, All Urban Consumers (%) Oct Sep Aug Oct Y/Y 2015 2014 2013
Total 0.4 0.3 0.2 1.6 0.1 1.6 1.5
Total less Food & Energy 0.1 0.1 0.3 2.1 1.8 1.7 1.8
  Goods less Food & Energy 0.1 -0.1 0.1 -0.5 -0.5 -0.3 -0.0
  Services less Energy 0.2 0.2 0.3 3.0 2.6 2.5 2.4
 Food -0.0 0.0 -0.0 -0.4 1.9 2.4 1.4
 Energy 3.5 2.9 -0.0 -0.1 -16.7 -0.3 -0.7
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