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Economy in Brief

U.S. CPI Strengthens With Higher Energy Prices
by Tom Moeller  February 15, 2017

The Consumer Price Index jumped 0.6% during January following a 0.3% December gain. It was the strongest rise since February 2013 and lifted y/y growth to 2.5%. Expectations had been for a 0.3% gain in the Action Economic Forecast Survey. Prices excluding food & energy rose 0.3% following two months of 0.2% gain. It was the firmest rise since March 2006. A 0.2% increase had been expected.

Higher energy prices led the pick-up in inflation with a 4.0% jump (10.8% y/y). Gasoline prices surged 7.8% (20.3% y/y) to the highest level since July 2015. Fuel oil prices increased 3.5% (NSA, 24.8% y/y) after a 6.0% jump. Natural gas prices improved 1.5% (10.1% y/y) while electricity costs were little changed (1.0 % y/y.

Goods prices excluding food & energy increased 0.4% (-0.2% y/y) following steadiness or decline in the prior four months. Apparel prices surged 1.4% (1.0% y/y) making up declines during three of the prior four months. New vehicle prices increased 0.9% (0.9% y/y). Home furnishings prices increased 0.4% (-1.7% y/y), but appliance prices inched just 0.1% higher (-4.3% y/y). Medical care goods prices rose 0.3% (4.7% y/y), but recreation product prices fell 0.2% (-3.6% y/y).

Prices for services less energy provided further strength with a 0.3% increase (3.1% y/y) for the third month in a row. Recreation services prices strengthened 0.7% (3.4% y/y) following no change. A 0.6% increase (3.2% y/y) in transportation prices reflected a 1.3% jump (-1.3% y/y) in public transportation costs. Medical care services prices rose 0.2% (3.6% y/y) for the third straight month. Shelter costs also rose 0.2% (3.5% y/y) following five straight months of 0.3% increase. Owners' equivalent rent of primary residences gained 0.2% (3.5% y/y), while primary residence rents gained 0.2% (3.9% y/y).

Food prices inched up 0.1% (-0.2% y/y) following six months of zero change. Dairy product prices increased 0.8% (-0.5% y/y). Meat, poultry & fish prices eased 0.1% (-2.4% y/y), but egg prices jumped 14.3% (-19.4% y/y). Fruit & vegetable prices declined 1.7% (-4.9% y/y) while cereal & bakery product costs eased 0.1% (-0.6% y/y) for a second month. Nonalchoholic beverage costs eased 0.3% (-1.0% 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 (%) Jan Dec Nov Jan Y/Y 2016 2015 2014
Total 0.6 0.3 0.2 2.5 1.3 0.1 1.6
Total less Food & Energy 0.3 0.2 0.2 2.3 2.2 1.8 1.7
  Goods less Food & Energy 0.4 0.0 -0.2 -0.2 -0.5 -0.5 -0.3
  Services less Energy 0.3 0.3 0.3 3.1 3.1 2.6 2.5
 Food 0.1 -0.0 -0.0 -0.2 0.3 1.9 2.4
 Energy 4.0 1.2 1.0 10.8 -6.6 -16.7 -0.3
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