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Economy in Brief

U.S. CPI Rebounds; Core Price Increase Moderates
by Tom Moeller  May 10, 2018

Consumer prices increased 0.2% (2.5% y/y) during April following a 0.1% March slip. A 0.3% increase had been expected in the Action Economics Forecast Survey. The CPI excluding food & energy improved 0.1% (2.1% y/y) after two months of 0.2% rise. A 0.2% gain had been expected.

Goods price inflation was uneven last month. Goods prices excluding food & energy slipped 0.1% (-0.4% y/y) for the second straight month. The decline reflected a 2.2% fall (-2.1% y/y) in prices of education & communication goods prices. Prices for used cars & trucks fell 1.6% (-0.9% y/y) and new vehicle prices dropped 0.5% (-1.6 y/y). Recreation product prices fell 0.3% (-2.8% y/y) led by a 0.8% decline (-12.7% y/y) in video & audio product costs. Medical care product prices were down 0.2% (+1.9% y/y). These declines were offset by a 2.1% rise (0.2% y/y) in household appliance prices and a 1.1% (0.1% y/y) strengthening of furniture & bedding costs. Also rising were apparel prices by 0.3% (0.8% y/y).

Countering the declines, services prices increased 0.2% (2.9% y/y) after a 0.3% gain. Shelter prices rose 0.3% (3.4% y/y) reflecting a 0.4% increase (3.7% y/y) in rents of primary residences. The owners' equivalent rent of primary residences increased 0.3% (3.4% y/y). Medical care services prices gained 0.2% (2.2% y/y) but public transportation costs fell 1.6% (-3.0% y/y). Recreation services prices declined 0.4% (+1.7% y/y). Education & communication services prices were little changed (0.3% y/y).

Food prices increased 0.3% last month (1.4% y/y) after a 0.1% uptick. Fruit & vegetable prices jumped 1.0% (-0.4% y/y). Meat prices strengthened 0.5% (2.4% y/y) while egg prices rose by 7.1%, up by roughly one-quarter y/y. Dairy & related product prices increased 0.4% (-0.4% y/y). Falling 0.6% (-0.8 y/y) were nonalcoholic beverage prices. Cereal & bakery product prices eased 0.2% and were little changed y/y.

Providing strength to consumer prices last month were energy prices with a 1.4% jump (7.9% y/y), as they rebounded after a 2.8% decline. Gasoline prices strengthened 3.0% (15.4% y/y) and fuel oil costs rose 2.7% (22.6% y/y). Electricity prices fell 0.6% (1.2% y/y) and natural gas prices declined 0.4% (+1.0% y/y).

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Slower Growth in First Quarter Appears Temporary from the Federal Reserve Bank of Dallas is available here.

Consumer Price Index, All Urban Consumers (% chg) Apr Mar Feb Apr Y/Y 2017 2016 2015
Total 0.2 -0.1 0.2 2.5 2.1 1.3 0.1
Total less Food & Energy 0.1 0.2 0.2 2.1 1.8 2.2 1.8
  Goods less Food & Energy -0.1 -0.1 0.1 -0.4 -0.7 -0.5 -0.5
  Services less Energy 0.2 0.3 0.2 2.9 2.7 3.1 2.6
 Food 0.3 0.1 -0.0 1.4 0.9 0.3 1.9
 Energy 1.4 -2.8 0.1 7.9 7.9 -6.6 -16.7
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