U.S. CPI Increases Negligibly in May; Core Prices Rise Steadily
by:Tom Moeller
|in:Economy in Brief
Summary
- Core goods prices hold steady.
- Service price strength is sustained.
- Energy prices fall sharply; food prices edge higher.
The Consumer Price Index rose 0.1% in May (4.0% y/y) following a 0.4% increase in April. The increase matched expectations in the Action Economics Forecast Survey. Prices excluding food & energy rose 0.4% for the third consecutive month. The gain matched expectations. The 5.3% y/y increase stood below the 6.6% September high.
The CPI less food, energy and shelter, another measure of core pricing power developed by Haver, increased 0.3% during May after increasing 0.4% in April. The 3.4% y/y increase remained below the 7.6% peak in February of last year.
In May, used car & truck prices strengthened 4.4% (-4.2% y/y) for the second consecutive month. These increases followed nine consecutive monthly declines. The CPI excluding food, energy, shelter and used car & truck prices rose 0.1% (4.2% y/y) following a 0.2% April gain. The rise was below 0.6% increases in August & September of last year.
Goods prices less food, energy and used car & trucks held steady in May (3.7% y/y) for the second consecutive month. Home furnishings prices fell 0.4% (+4.1% y/y) for the second straight month while appliance costs weakened 0.3% (-0.2% y/y) after falling 1.9% in April. Apparel prices rose 0.3% (3.5% y/y) for a third straight month but new vehicle prices eased 0.1% (+4.7% y/y) after slipping 0.2% in April. Education & communication goods costs slipped 0.2% (-6.9% y/y), the same as in April. Recreation goods prices held steady (2.7% y/y) following a 0.3% rise.
Service costs less energy increased 0.4% (6.6% y/y) in May for the third consecutive month. Shelter prices rose 0.6% (8.0% y/y) after rising 0.4% in April as owners’ equivalent rent of primary residences increased 0.5% (8.1% y/y) for the third consecutive month. Rents of primary residences rose 0.5% (8.7% y/y) after a 0.6% gain. Education & communication prices edged 0.2% lower (+2.8% y/y) after a 0.1% uptick, while transportation service prices rebounded 0.8% (10.2% y/y) after a 0.2% decline. Recreation service prices slipped 0.1% (+5.8% y/y) following a 0.7% increase, but medical care service costs also eased 0.1% (-0.1% y/y), down for the seventh month in the last eight.
Energy prices declined 3.6% last month (-11.7% y/y) after a 0.6% April rise. Gasoline prices fell 5.6% (-19.7% y/y) after rising 3.0% in April. Fuel oil & other fuel costs were down 5.3% (-28.6% y/y) after holding steady in April and electricity prices weakened 1.0% (+5.9% y/y), off for the third straight month. Natural gas prices fell 2.6% (-11.0% y/y), the fourth straight month of decline.
Food prices rose 0.2% (6.7% y/y) in May following two months of stability. Egg prices fell 13.8% (-0.4% y/y), off for the fourth straight month. Meat, poultry & fish prices eased 0.1% (+0.5% y/y), down for the last three straight months, while cereal & bakery product prices held steady (+10.7% y/y) after rising 0.2% in April. Fruit & vegetable prices jumped 1.3% (2.7% y/y) after two months of decline and dairy prices weakened 1.1% (+4.6% y/y) after falling 0.7% in April. Nonalcoholic beverage prices rose 0.7% (8.7 y/y) after slipping 0.1% in April.
The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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