Data Updates

Data Updates

Keeping you up to date on the latest data releases.

September 2014 :: Inflation and Prices

  • 05.30.2014
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 2.4 percent in April. This follows an increase of 2.3 percent in March and over the past twelve months, the PCE price index has increased 1.6 percent. The core PCE price index, which excludes both the food and energy components, increased 2.1 percent in April and has increased 1.4 percent over the past year. The market-based core PCE price index, which also excludes most imputed prices, also increased 2.1 percent in April. This follows increases of 1.0 percent in February and 1.9 percent in March. On a year-over-year basis, the market-based core PCE price index has increased 1.3 percent.
  • 05.30.2014
  • Consumer Sentiment
  • Final numbers show that the University of Michigan’s Index of Consumer Sentiment increased slightly to 81.9 from the preliminary number of 81.8 posted earlier in May. The Index of Consumer Expectations increased to 73.7 from the preliminary number of 73.2. The economic conditions index decreased to 94.5 from the preliminary number of 95.1.

    As for inflation expectations in May, consumers expect a year-ahead inflation rate of 3.3 percent and a longer rate (5- to 10-year) of 2.8 percent.

  • 05.27.2014
  • Home Price Indexes
  • In March, the S&P Case-Shiller 10-city and 20-city composite housing price indexes rose 0.8 percent and 0.9 percent for the month and posted year-over-year increases of 12.6 percent and 12.4 percent, respectively. In the first quarter of 2014, the national index gained 0.2 percent and 10.3 percent over the past four quarters. Nineteen of the 20 cities showed positive returns in March —New York was the only city to decline. Dallas and Denver reached new index peaks. Annual price increases for the two composites have slowed in the past four months and 13 cities saw annual price changes moderate in March. Chicago showed its highest year-over-year return of 11.5 percent since December 1988. Meanwhile, Cleveland showed the slowest growth, improving just 3.9 percent over the past 12 months. Overall, home prices are back to mid-2004 price levels.

    The FHFA housing price index rose 0.7 percent in March and 6.5 percent annually. In the first quarter of 2014 the index improved 1.3 percent and 6.6 percent over the past four quarters. Of the nine census divisions, the Pacific division experienced the strongest increase in the first quarter, posting a 2.1 percent increase and a 13.2 percent increase since last year. House prices were weakest in the Middle Atlantic division, where prices increased 0.1 percent from the previous quarter. Modest inventories of homes available for sale likely played a significant role in driving the price increase, which was similar to appreciation in the preceding quarter. Overall, mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac are back to mid-2005 price levels.

  • 05.16.2014
  • Consumer Sentiment
  • According to the May preliminary results from the University of Michigan’s Index of Consumer Sentiment, consumer confidence fell 2.3 points to 81.8, down from April’s reading of 84.1. Declines in the overall index were due to decreases observed in both subindexes: current economic conditions and consumer expectations. Current economic conditions fell 3.6 points to 95.1 in early May, down from 98.7 in April. Consumer expectations fell 1.5 points to 73.2 (from 74.7 in May). However, a repeat high of 58 percent of consumers indicated that they believed the current state of the economy had improved, up 9 percentage points from April. The overall decline likely can be attributed to consumers’ assessment of their personal finances. Only 34 percent of those survey reported gains, as higher prices were mentioned repeatedly. Finally, buying attitudes toward household durables decreased from 143 to 146 in May’s preliminary results.

    Inflation expectations remained nearly unchanged. In early May, consumers again expect prices to increase 3.2 percent within a year and 2.8 percent over the long-term.

  • 05.15.2014
  • CPI
  • The headline CPI index rose at an annualized rate of 3.2 percent in April after increasing 2.4 percent in March and 1.2 percent in February. Excluding food and energy, the “core” CPI index posted gains of 2.9 percent after rising 2.5 percent in March and 1.4 percent in February. On a year-over-year basis, the headline CPI increased 2.0 percent, up from its first quarter average of 1.4 percent to post its highest year-over-year gain since July of 2013. After increasing 1.6 percent in every month of the first quarter of 2014, the core CPI advanced 1.8 percent on a yearly basis in April, which was also its largest increase since summer 2013. The 16 percent trimmed-mean increased 2.9 percent on a monthly basis and the median CPI rose 3.2 percent in April. Both indicators came in above their respective first quarter averages of 1.9 and 2.3 percent. The median CPI rose 2.2 percent on a year-over-year basis after posting a 2.1 percent average increase throughout the first quarter of 2014. The trimmed-mean increased 1.8 percent on a yearly basis after averaging 1.6 percent in the first quarter.
  • 05.14.2014
  • Producer Price Index
  • The Producer Price Index (PPI) increased at an annualized rate of 8.8 percent in April. On a year-over-year basis, PPI is up 2.1 percent. This is the largest 12-month advance since March 2012. Producer prices for finished consumer foods increased at an annualized rate of 31.5 percent. Meat and dairy prices maintain strong momentum, and poultry prices rose in April. Energy prices increased at an annualized rate of 5.7 percent. Excluding volatile food and energy prices, “core” PPI is up 3.3 percent and core crude prices increased 11.9 percent.
  • 05.01.2014
  • Personal Income
  • Nominal personal income increased at a nonannualized rate of 0.5 percent in March, following increases of 0.4 percent in both January and February. Over the past year, nominal personal income has increased 3.4 percent. Disposable personal income (DPI)—personal income less current personal taxes—also increased 0.5 percent in March, and DPI has increased 3.3 percent over the past twelve months. After controlling for price changes, real disposable personal income increased 0.3 percent in March, which follows similar increases of 0.3 percent in both January and February. Since March of 2013, real DPI has increased 2.2 percent.

    Real personal consumption expenditures increased 0.7 percent in March. This follows increases of 0.1 percent in January and 0.4 percent in February. On a year-over-year basis, real consumption has increased 2.9 percent. Contributing to the monthly increase in consumption was a 1.4 percent increase in goods consumption, which consisted of a 2.7 percent increase in consumption of durable goods consumption and a 0.9 percent increase in consumption of nondurable goods. Services consumption was also higher in March, increasing 0.4 percent. Services consumption has picked up some momentum recently, averaging monthly increases of 0.4 percent so far in 2014 compared with monthly averages of 0.2 percent in 2013 and 0.1 percent in 2012. A large source of the recent increase in services consumption is coming from consumption of health care services, which has averaged monthly increases of 0.7 percent so far in 2014. Since March of 2013, consumption of services has increased 2.4 percent.

  • 05.01.2014
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 2.3 percent in March, following increases of 1.3 percent in January and 0.8 percent in February. On a year-over-year basis, the PCE price index has increased 1.1 percent. The core PCE price index, which excludes both the food and energy components, increased 2.1 percent in March and 1.2 percent over the past year. The market-based core PCE price index, which also excludes most imputed prices, increased 1.8 percent in March. This follows increases of 1.1 percent in January and 0.9 percent in February. Over the past year, this index has increased 1.1 percent.
  • 05.01.2014
  • ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) rose 1.2 percentage points to 54.9 in the month of April, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only once since July 2009. Three of the five components of the PMI increased since March. Furthermore, all five components were above the growth threshold of 50. The employment index posted the largest monthly increase of 3.6 percent. Supplier deliveries increased 1.9 percent and inventories rose 0.5 percent. New orders were unchanged over the month and production fell 0.2 percent. The ISM prices index fell 2.5 percentage points to 56.5 percent. Prices have decreased by 5.0 percentage points since February 2013’s high of 61.5 percent.
  • 04.30.2014
  • Employment Cost Index
  • Employer costs of compensation for civilian workers rose 0.3 percent (nonannualized) in the first quarter of 2014, following a 0.5 percent increase in the fourth quarter of 2013. The wages and salary component increased 0.3 percent, slightly below the fourth quarter?s 0.5 percent advance. The benefits component rose 0.4 percent in the fourth quarter. Year-over-year, civilian compensation did not differ from the post-recession average growth of 1.9 percent. Civilian wages and salaries increased 1.6 percent over the past twelve months, while benefits rose 2.4 percent. Private compensation grew 0.7 percent from last quarter. Private wages and salaries increased 0.6 percent, while benefits grew 0.8 percent.
  • 04.29.2014
  • Home Price Indexes
  • In February the S&P/Case-Shiller 10- and 20-city housing price indexes were unchanged for the month, but rose 13.1 percent and 12.9 percent, respectively over the past 12 months. Thirteen of the 20 MSAs experienced price declines over the month. Cleveland led the declines, down 1.6 percent—the sharpest decline since January 2012, while San Diego showed the most improvement, up 1.0 percent. Annual growth rates cooled the most they have been for some time now and Dallas and Denver remain the only cities to reach new post-crisis peaks. Overall price are back to mid-2004 price levels.

    The FHFA housing price index rose 0.6 percent in February, representing the third consecutive month of growth and is up 6.9 percent since February 2013. Regionally, all areas showed positive growth on an annual basis while monthly growth rates ranged from a 2.5 percent decline in New England to a 1.7 percent increase in the South Atlantic. Overall, home prices are back to mid-2005 price levels.

  • 04.25.2014
  • Consumer Sentiment
  • Final numbers show that the University of Michigan’s Index of Consumer Sentiment increased to 84.1 from the preliminary number (82.6) posted earlier in April. This reading is the highest reading since July 2013. The Index of Consumer Expectations increased to 74.7 from the preliminary number of 73.3. The economic conditions index increased to 98.7 from the preliminary number of 97.1.

    As for inflation expectations in April, consumers expect a year-ahead inflation rate of 3.2 percent and a longer (five- to ten-years) rate of 2.9 percent.

  • 04.15.2014
  • Consumer Price Index
  • The headline CPI index rose at an annualized rate of 2.4 percent from February to March after increasing 1.2 percent in February and 1.7 percent in January. Excluding food and energy prices, the “core” CPI index advanced 2.5 percent after rising 1.4 percent last month. On a year-over-year basis, the headline CPI rose 1.5 percent, up from February’s 1.1 percent advance and closer in-line with January’s 1.6 percent and December’s 1.5 percent advances. The core CPI advanced 1.7 percent on a year-over-year basis, edging up from February’s 1.6 percent increase. The 16 percent trimmed-mean rose 2.4 percent and the median CPI advanced 2.6 percent in March. The trimmed-mean increased 1.7 percent on a year-over-year basis, a slight uptick from its 1.6 percent increase in February and January. The median CPI rose 2.1 percent on a year-over-year basis after advancing 2.0 percent for five of the past six months.
  • 04.11.2014
  • Producer Price Index
  • The Producer Price Index (PPI) decreased at an annualized rate of 0.6 percent in March and on a year-over-year basis, PPI is up 1.7 percent. Producer prices for finished consumer foods increased at an annualized rate of 9.1 percent. Energy prices decreased at an annualized rate of 11.6 percent. Excluding volatile food and energy prices, “core” PPI is up 1.3 percent and “core” crude prices increased 5.9 percent.
  • 04.11.2014
  • Consumer Sentiment
  • Preliminary numbers show that the University of Michigan’s Index of Consumer Sentiment increased 2.6 points to 82.6 in early April. This is the highest reading since August 2013. Both the current economic conditions and consumer expectations indexes contributed to the increase in the overall numbers. The current economic conditions index rose slightly to 97.1 from 95.7 in March. The consumer expectations index increased to 73.3, up from 70.0. Finally, buying attitudes toward household durables decreased from 148 to 142 in April’s preliminary results.

    As for inflation expectations in early April, consumers expect a year-ahead inflation rate of 3.1 percent and a longer-term (five- to ten-years) rate of 3.0 percent.

  • 04.01.2014
  • PMI and ISM Manufacturing
  • The Purchasing Managers’ Index (PMI) rose 0.5 percentage points to 53.7 in March, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Two of the five components of the PMI increased since February. Furthermore, all five components were above the growth threshold of 50. The production index posted a large monthly increase, rising 7.7 percentage points to 55.9. New orders increased 0.6 percentage points to 55.1. The inventory index was unchanged at 52.5. Supplier deliveries fell 4.5 percentage points to 54.0 percent. The employment index fell 1.2 percentage points to 51.1.

    The ISM prices index fell 1.0 percentage point to 59.0 percent. Prices have decreased by 2.5 percentage points since February 2013’s high of 61.5 percent.

  • 03.28.2014
  • Consumer Sentiment
  • Final numbers show that the University of Michigan’s Index of Consumer Sentiment increased to 80 from the preliminary number (79.9) posted earlier in March. The Index of Consumer Expectations increased to 70 from the preliminary number of 69.4. The economic conditions index decreased to 95.7, from the preliminary number of 96.1.

    In regards to inflation expectations in March, consumers expect a year-ahead inflation rate of 3.2 percent and a longer (5- to 10-year) rate of 2.9 percent.

  • 03.18.2014
  • Consumer Price Index
  • The headline CPI index rose at an annualized rate of 1.2 percent from January to February after increasing 1.7 percent in January and 2.9 percent in December. Excluding food and energy, the “core” CPI index advanced 1.4 percent after rising 1.5 percent last month. The BLS reported that more than half of the increase in the consumer basket was driven by a 4.9 percent jump in the food index. Counteracting the increase in food, the energy index declined −5.6 percent. Plummeting gasoline prices (down −19.0 percent) offset advances in fuel oil and natural gas. On a year-over-year basis, the headline CPI rose 1.1 percent, bringing February’s number below those of January (1.6 percent) and December(1.5 percent). The core CPI advanced 1.6 percent, unchanged from January’s 1.6 percent increase. The 16 percent trimmed-mean posted annualized monthly gains of 1.9 percent and the median CPI rose 2.2 percent. The year-over-year growth rates of the trimmed-mean CPI and the median CPI remained unchanged relative to the past two months with the trimmed-mean marking 1.6 percent and the median 2.0 percent. The median CPI has increased at a pace of 2.0 percent for five of the past six months.
  • 03.14.2014
  • Producer Price Index
  • The Producer Price Index (PPI) increased at an annualized rate of 4.3 percent in February and on a year-over-year basis, PPI is up 1.3 percent. Producer prices for finished consumer foods increased at annualized rate of 8.5 percent. Energy prices increased at an annualized rate of 5.7 percent. Excluding volatile food and energy prices “core” PPI is up 1.3 percent and core crude prices decreased 7.6 percent.
  • 03.03.2014
  • ISM Manufacturing
  • The Purchasing Managers’Index (PMI) rose 1.9 percentage points to 53.2 in February, which indicates a general expansion in the manufacturing sector as the index is above the growth threshold of 50. The index has slipped below 50 only twice since July 2009. Three of the five components of the PMI increased since January. Furthermore, four of the five components were above the growth threshold of 50. The production index posted a sharp monthly decline, falling 6.6 percentage points to 48.2. New orders increased 3.3 percentage points to 54.5. The inventory index reversed three consecutive monthly declines rising to 52.5 from 44.0 in January. Supplier deliveries increased 4.2 percentage points to 58.5 percent. The employment index was unchanged at 52.3. The ISM Prices Index fell 0.5 percentage points to 60.0 percent. Prices have decreased by 1.5 percentage points since February 2013’s high of 61.5 percent.
  • 03.03.2014
  • PCE Price Indexes
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.2 percent in January, following a 2.0 percent increase in December. Over the past twelve months, the PCE price index increased 1.2 percent. The core PCE price index, which excludes the volatile food and energy components, increased 1.1 percent in January, following increases of 1.4 percent in November and 1.0 percent in December. On a year-over-year basis, the core PCE price index has increased 1.1 percent, as the 12-month changes in this index have mostly remained in a relatively narrow window between 1.1 and 1.2 percent since April of 2013. The market-based core PCE price index, which also excludes most imputed prices, increased 0.7 percent in January, following increases of 1.2 percent in November and 0.6 percent in December. Since January of 2013, this index has increased 1.0 percent.
  • 02.25.2014
  • Home Price Indexes
  • The S&P Case-Shiller national housing price ticked down 0.3 percent from the third to fourth quarter of 2013, but was up 11.3 percent compared to the fourth quarter of 2012. On a monthly basis, the ten-city composite index showed no change and the twenty-city composite index slipped down 0.1 percent from November to December. On an annual basis, both the ten- and twenty-city composite indexes showed strong improvement, increasing 13.6 percent and 13.4 percent, respectively. While no cities showed sharp monthly price movements, Las Vegas, Los Angeles, and San Francisco posted annual price improvements of over 20 percent. Overall index home prices are back to mid-2004 price levels.

    The FHFA housing price index rose 1.2 percent in the fourth quarter of 2013 and 7.6 percent over the past four quarters. This represents the eighth consecutive month of growth after 18 consecutive months of declining home prices. On a monthly basis, the index rose 0.8 percent and 7.7 percent on an annual basis. The Pacific and Mountain regions showed the strongest annual gains, up 14.9 percent and 12.6 percent, respectively. This was the highest quarter of growth for home price appreciation since the fourth quarter of 2005, and the total index is roughly the same as mid-2005 price levels.

  • 02.19.2014
  • Producer Price Index
  • The Producer Price Index (PPI) increased at an annualized rate 6.9 percent in January. On a year-over-year basis, PPI is up 1.5 percent. Producer prices for finished consumer foods increased at an annualized rate of 13.8 percent. Energy prices increased at an annualized rate of 5.1 percent. Excluding volatile food and energy prices, “core” PPI is up 6.6 percent and core crude prices increased 18.3 percent, the greatest increase since November 2012.
  • 02.14.2014
  • Consumer Sentiment
  • Preliminary numbers show that the University of Michigan’s index of consumer sentiment remained unchanged at 81.2 in early February from January’s reading. The current economic conditions index dropped to 94.0 from 96.8. Conditions of consumer’s personal finance were viewed less favorably, which was due in part to higher prices and weaker income growth. The index of consumer expectations increased in February to 73.0 from 71.2. Consumers are somewhat more optimistic about the long-term prospects for the national economy. The survey noted that news reaching consumers of recent economic development grew more negative. Mentions of the scarcity of jobs and negative references to the government’s economic policies both rose this month. Finally, buying attitudes toward household durables decreased to 146 from 147 in February’s preliminary results.

    As for inflation expectations in early February, consumers expect a year-ahead inflation rate of 3.3 percent and a longer-term (five- to ten-year) rate of 2.9 percent.

  • 02.14.2014
  • Import and Export Prices
  • Import prices inched up by 0.1 percent in January after rising 0.2 percent on a monthly basis in December. Nonpetroleum prices posted a 0.4 percent monthly gain, slightly offsetting lower petroleum prices, which fell by −1.2 percent in January. On a year-over-year basis, import prices fell −1.5 percent, marking the fifth consecutive month of yearly declines. Petroleum plummeted by −4.0 percent on a yearly basis, after a more modest drop in December of −0.6 percent. Nonpetroleum prices were down as well by −0.9 percent and marked eleven consecutive months of yearly declines. Overall, January’s trade price report extends the weakness seen in last quarter of 2013.

    Export prices rose 0.2 percent in December after increasing 0.4 percent in December. On a year-over-year basis, export prices fell −1.2 percent, marking six months of consecutive declines.

  • 01.31.2014
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 2.5 percent in December. This follows a 0.2 percent increase in November, and on a year-over-year basis, the PCE price index has increased 1.1 percent. Contributing to the monthly increase in the headline index during December was an increase in the volatile price index for energy goods and services, which was up 29.5 percent for the month. The core PCE price index, which excludes food and energy prices, increased 1.1 percent in December, following 1.1 percent increases in each of the prior three months. Over the past year, the core PCE price index has increased 1.2 percent, as the twelve-month percent change in core PCE prices has remained in the narrow range between 1.1 and 1.2 percent since early 2013. The market-based core PCE price index, which also excludes most imputed prices, increased 0.8 percent in December, following increases of 1.1 percent in both October and November, and over the past year, this index has increased 1.2 percent.
  • 01.16.2014
  • Consumer Price Index
  • The CPI rose 3 percent in December (with an annualized rate of 3.6 percent). Increases in the energy and shelter indexes were major factors in the increase. The energy index rose 2.1 percent and the shelter index rose 0.2 percent. The Federal Reserve Bank of Cleveland’s Median CPI also rose 0.3 percent, the largest one-month gain in this series since September 2008.

    Core CPI rose 0.2 percent (1.3 percent annualized rate) and the 16 percent trimmed-mean CPI rose 0.2 percent (2.2 percent annualized rate).

    The twelve-month change in the median CPI rose to 2.1 percent after three months at 2.0 percent. Over the twelve months through December, the core CPI rose 1.7 percent and the trimmed-mean CPI rose 1.7 percent. Both figures are similar to what they have been for the prior five months. The twelve-month change in the all-items index rose from 1.2 percent in November to 1.5 percent in December.

    The Bureau of Labor Statistic’s press release included a year-end review of CPI in 2013. The CPI rose 1.5 percent in 2013 and 1.7 percent in 2012, marking the first time since 1997-98 that the CPI rose less than 2.0 percent for two years in a row.

  • 01.15.2014
  • Producer Price Index
  • The Producer Price Index (PPI) increased at an annualized rate of 5.0 percent in December and on a year-over-year basis, PPI is up 1.2 percent. Producer price for finished consumer foods decreased 6.8 percent. Energy prices increased 20.6 percent in December, following a decrease of 4.3 percent in November. Energy goods had the biggest gain in six months, with gasoline prices being the main driver of this increase. Excluding volatile food and energy prices, “core” PPI is up 3.3 percent and core crude prices increased 7.2 percent.
  • 01.14.2014
  • Import and Export Prices
  • Import prices were unchanged in December after falling −0.9 percent on a monthly basis in November. Nonpetroleum prices were unchanged as well and petroleum prices edged down −0.1 percent. On a year-over-year basis, import prices fell −1.3 percent, marking the fourth consecutive month of yearly declines. Petroleum prices dropped −1.5 percent on a yearly basis after plummeting −4.3 percent last month. Nonpetroleum prices were down as well by −1.3 percent and marked ten consecutive months of yearly declines. Overall, December’s trade price report extends the weakness seen in October and November.

    Export prices rose 0.4 percent in December after increasing 0.1 percent in December. On a year-over-year basis, export prices fell −1.0 percent, marking five months of consecutive declines.

  • 12.17.2013
  • CPI
  • The CPI was unchanged in November (with an annualized rate of 0.4 percent). Declines in fuel prices were offset by increases in shelter prices and airline fares. Energy prices fell 1.0 percent and are down 2.4 percent over the last 12 months.

    At 0.2 percent (1.9 percent annual rate), the change in the core CPI was 0.1 percent higher than in September and October. Federal Reserve Bank of Cleveland-based measures of underlying inflation increased at similar rates in November: 0.2 percent (2.2 percent annual rate) for the Median CPI and 0.1 percent (1.2 percent annual rate) for the trimmed-mean CPI.

    The twelve-month change in the median CPI remained at 2.0 percent for the third month in a row. Over the past twelve months through November, the core CPI rose 1.7 percent and the trimmed-mean CPI rose 1.6 percent. Both are similar to what they have been for the prior five months. The twelve-month change in the all-items index rose from 1.0 percent in October to 1.2 percent.

    In November, the most common ranges of annualized price changes of components of the CPI were less than 1 percent (31.0 percent) and 1 percent to 3 percent (27.0 percent) and. Note that the components are weighted by their relative importance in the CPI.

  • 12.13.2013
  • Producer Price Index
  • The Producer Price Index (PPI) decreased at an annualized rate of 0.6 percent in November. On a year-over-year basis, the PPI is up 0.7 percent. Producer prices for finished consumer foods remained unchanged. Energy prices decreased 4.3 percent in November, following a decrease of 17.0 percent in October. Excluding volatile food and energy prices, “core” PPI is up 0.7 percent and core crude prices increased 18.2 percent following seven months of decreases.
  • 12.12.2013
  • Import and Export Prices
  • Import prices dropped −0.6 percent in November after falling at the same pace in October. Petroleum prices plummeted −3.5 percent, driving the drop in the overall index. November marks the second month where petroleum prices fell by more than 3.0 percent on a monthly basis. Nonpetroleum prices maintained October’s pace and edged up 0.1 percent. On a year-over-year basis, import prices fell −1.5 percent, marking the third consecutive month of yearly declines. Petroleum prices fell −2.8 percent on a yearly basis, while nonpetroleum prices dropped −1.2 percent. Nonpetroleum prices have now fallen on a yearly basis for nine consecutive months. Overall, November’s trade price report largely extends the weakness seen in October’s report.

    Export prices increased 0.1 percent in November after falling −0.6 percent in October. On a year-over-year basis, export prices fell −1.6 percent, marking four months of consecutive declines.

  • 12.06.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index declined at an annualized rate of 0.4 percent in October, following an increase of 1.4 percent in September. On a year-over-year basis, the PCE price index has increased just 0.7 percent. Prices for energy goods and services, which tend to be relatively volatile, declined at an annualized rate of 19.0 percent for the month, putting downward pressure on the PCE price index. Excluding food and energy prices, the core PCE price index increased 0.9 percent in October, which follows monthly increases of 1.4 and 1.1 percent in August and September, respectively. Core PCE prices have increased 1.1 percent over the past twelve months, as the year-over-year changes in both the PCE price index and core PCE price index have been on a steady downward trend since early 2012. The market-based core PCE price index, which also excludes most imputed prices, increased 0.2 percent in October and has increased 1.0 percent over the past year.
  • 11.21.2013
  • Producer Price Index
  • The Producer Price Index (PPI) decreased at an annualized rate of 1.8 percent in October. On a year-over-year basis, the PPI is up 0.3 percent. Producer prices for finished consumer foods increased 9.9 percent, reversing the decline of 11.6 percent. Energy prices decreased 17.0 percent in October and year-over?year energy prices are down 3.4 percent. Excluding volatile food and energy prices, “core” PPI is up 2.0 percent in October. At earlier stages of production, core intermediate good prices are down 0.6 percent and core crude prices fell for the second month in row 5.5 percent.
  • 11.20.2013
  • Employment Cost Index
  • Employer costs of compensation for civilian workers rose 0.4 percent (nonannualized) in the third quarter, following the prior quarter’s 0.5 percent expansion. The wages and salary component increased 0.3 percent, slightly below the second quarter’s 0.4 percent advance. The benefits component increased from 0.4 percent to 0.7 percent. On a year-over-year basis, civilian compensation advanced 1.9 percent in the third quarter, on par with its average (1.9 percent) since the recession ended. Civilian wages and salaries increased 1.6 percent over the past 12 months, also on par with its average (1.6 percent) since the recession ended. Growth in civilian benefits continues to slow (from 3.7 percent in 2011 to 2.3 percent in the third quarter of 2013). On a year-over-year basis, private compensation growth was 1.9 percent, private wages and salaries increased 1.8 percent, and benefits grew just 2.2 percent. Inflationary impetus from the labor market continues to be minimal as compensation growth has averaged 1.9 percent for the since the recession ended.
  • 11.08.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.0 percent in September, following increases of 1.1 percent in July and 1.5 percent in August. Over the past year, the headline PCE price index has increased 0.9 percent. Prices for energy goods and services, a volatile component of the PCE price index, increased 10.2 percent, contributing positively to the headline index. The core PCE price index, which excludes food and energy prices, increased 0.7 percent in September and has increased 1.2 percent over the past twelve months. The market-based core PCE price index, which also excludes most imputed prices, increased 0.6 percent for the month, following increases of 1.3 and 1.0 percent in July and August, respectively, and has increased 1.1 percent since September of last year.
  • 10.30.2013
  • CPI
  • The Consumer Price Index (CPI) rose 0.2 percent (2.2 percent annually) in September. After falling the past two months, energy prices rose 0.8 percent, their largest increase since June. However, energy prices are down 3.1 percent over the past 12 months.

    At 0.1 percent (1.5 percent annually), the change in the core CPI was smaller than that for the all-items index. Federal Reserve Bank of Cleveland-based measures of underlying inflation increased at about the same pace in September—0.2 percent (2.1 percent annually) for the median CPI and 0.2 percent (1.7 percent annually) for the trimmed-mean CPI.

    The twelve-month change in the median CPI fell to 2.0 percent after five months at 2.1 percent. Over the twelve months through September, both the core CPI and the trimmed-mean CPI rose 1.7 percent and are similar to what they have been for the previous five months. The twelve-month change in the all-items index fell from 1.5 percent in August to 1.2 percent in September.

    In September, the most common ranges of annualized price changes of components of the CPI were 1 percent to 3 percent (39.3 percent) and 3 percent to 5 percent (25.7 percent). For the second month in a row, over 35 percent of the components in the CPI increased by 3 percent or more. Note that the components are weighted by their relative importance in the CPI.

  • 10.30.2013
  • Producer Price Index
  • The Producer Price Index (PPI), decreased at an annualized rate of 0.60 percent in September. On a year-over-year basis, PPI is up 0.30 percent. Producer prices for finished consumer foods fell 11.59 percent in September, compared to an increase of 7.28 percent in August. Energy prices increased 5.73 percent in September. Year-over?year energy prices are down 2.80 percent. Excluding volatile food and energy prices, “core” PPI was up 0.65 percent in September. At earlier stages of production, core intermediate goods prices increased 1.25 percent and core crude prices decreased 10.85 percent.
  • 09.27.2013
  • PCE Prices
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.7 percent in August, following increases of 4.7 and 1.1 percent in June and July, respectively. Over the past twelve months, the PCE price index has increased 1.2 percent. The price index for energy goods and services declined 2.7 percent during the month, putting a little downward pressure on the headline index. The core PCE price index, which excludes food and energy prices, increased 1.9 percent for the month, following an increase of 1.0 percent in July. The twelve-month percent change in the core PCE price index was 1.2 percent, compared with a year-over-year percent change of 1.1 percent in July. This marks the first increase in year-over-year changes (a popular measure of core inflation) since October of last year. The market-based core PCE price index, which also excludes most imputed prices, increased 1.0 percent in August, following an increase of 1.3 percent in July, and has increased 1.2 percent over the past twelve months.
  • 09.17.2013
  • CPI
  • The CPI rose 0.1 percent (1.1 percent annual rate) in August. Energy prices fell for the second month in a row, with both gasoline and energy services from utilities indexes falling at annualized rates of −1.1 percent and −7.6 percent, respectively. Overall, the energy index declined at an annualized rate of 3.5 percent in August.

    The change in the core CPI was essentially the same as that for the all items index, 0.1 percent (1.5 percent annual rate). The Federal Reserve Bank of Cleveland-based measures of underlying inflation increased at about the same pace in August: 0.2 percent (2.0 percent annual rate) for the median CPI and 0.1 percent (1.5 percent annual rate) for the trimmed-mean CPI. On a year-over-year basis, these three measures of underlying inflation continue to show considerable stability. The twelve-month change in the median CPI has been 2.1 percent since March, while the core CPI and the trimmed-mean CPI have fluctuated in a band of 0.2 percentage points since then. Over the past twelve months, the core CPI rose 1.8 percent and the trimmed-mean CPI rose 1.7 percent. The year-over-year change in the all items index has fluctuated from 1.1 percent in April to 1.5 percent in August.

    In the previous six months, 30 to 50 percent of prices (on a weighted basis) fell between 1 and 3 percent, but only 16.4 percent were in that range in August. The distribution of prices changes increased noticeably in all other ranges.

  • 08.30.2013
  • PCE Prices
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.1 percent in July, following an increase of 5.0 percent in June and a 1.2 percent increase in May. Over the past twelve months, the PCE price index has increased 1.4 percent. The price index for energy goods and services—a volatile component of the headline PCE price index—was a bit more moderate in July compared with June, increasing 3.5 percent. In June, prices for energy goods and services jumped 50.0 percent at an annualized rate, contributing to the large increase in the PCE price index. The core PCE price index, which excludes food and energy prices, increased 0.9 percent in July and over the past twelve months, has increased 1.2 percent. The year-over-year changes in the core PCE price index have been hovering around 1.2 percent since April. The market-based core PCE price index, which excludes most imputed prices, increased 1.3 percent in July, following increases of 1.4 and 2.6 percent in May and June, respectively, and has increased 1.2 percent since July of last year.
  • 08.15.2013
  • Consumer Price Index
  • The CPI rose a modest 0.2 percent (1.9 percent annual rate) in July. Unlike in June, energy prices were much more subdued in July. While gasoline prices rose, this increase was partially offset by declines in the indexes for natural gas and electricity. Overall, the energy index rose 2.8 percent in July and 4.8 percent over the past twelve months. The latter is the largest year-over-year increase in the energy index since February 2012, but the average annual increase in the index over the last decade was 6.3 percent.

    Federal Reserve Bank of Cleveland-based measures of underlying inflation increased at about the same pace in July?0.2 percent (2.0 percent annual rate) for the median CPI and 0.1 percent (1.7 percent annual rate) for the trimmed-mean CPI. On a year-over-year basis, these three measures of underlying inflation continue to show considerable stability. The twelve-month change in the median CPI has been 2.1 percent since March, while the core CPI and the trimmed-mean CPI have fluctuated in a band of 0.2 percentage points since then. Over the past twelve months through July, the core CPI rose 1.7 percent and the trimmed-mean CPI rose 1.8 percent. The year-over-year change in the all-items index has drifted up from 1.1 percent in April to 2.0 percent in July.

    With respect to the distribution of price changes, about 40 percent of price changes (on a weighted basis) fell between 1 and 3 percent, with about the same proportion of prices rising at rates below 1 percent.

  • 08.14.2013
  • Producer Price Index
  • The Producer Price Index (PPI), was unchanged in July after advancing strongly in May (0.5 percent) and June (0.8 percent). On a year-over-year basis, the PPI was up 2.1 percent in July. Producer prices for finished consumer foods in July rose 0.5 percent, the smallest increase seen since April. Energy prices declined 2.5 percent in July, compared to an increase of 40.8 percent in June. Year-over-year energy prices are still up 4.0 percent. Excluding volatile food and energy prices, “core” PPI rose 0.7 percent in July, down from the 2.0 percent increase in June. At earlier stages of production, core intermediate good prices and core crude prices both decreased 3.1 percent.
  • 08.02.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 4.9 percent in June, following a 3.0 percent decrease in April and a 1.2 percent increase in May. On a year-over-year basis, the PCE price index has increased 1.3 percent. The price of energy goods and services played a role in pushing up the headline index during June, as energy prices jumped 50.7 percent during the month. The core PCE price index, which excludes food and energy prices, increased 2.6 percent in June, following a decrease of 0.2 percent in April and an increase of 1.4 percent in May. Since June of last year, core PCE prices have increased 1.2 percent. The market-based core PCE price index, which also excludes most imputed prices, increased 2.6 percent in June, following an increase of 1.4 percent in May, and is up 1.1 percent over the past twelve months.
  • 07.12.2013
  • PPI
  • The Producer Price Index (PPI) rose at an annualized rate of 9.6 percent in June, advancing for the second straight month. On a year-over-year basis, the PPI is up 2.5 percent. Producer prices for finished consumer foods rose 2.4 percent in June, down slightly from May’s 8.0 percent increase. Energy prices saw a sharp increase of 40.8 percent in June. Year-over-year energy prices are only up a slight 4.2 percent. Excluding volatile food and energy prices, “core” PPI rose 2.0 percent in June up from the 0.7 percent increase in May. At earlier stages of production, core intermediate good prices increased 0.6 percent and core crude prices 1.0 percent in June.
  • 07.11.2013
  • Import and Export Prices
  • Import prices fell −0.2 percent in June, marking four months of consecutive declines. Nonpetroleum prices drove the decrease, falling −0.3 percent while petroleum prices increased 0.2 percent after posting declines for two months. Like overall imports, nonpetroleum prices have now decreased for four consecutive months. On a year-over-year basis, import prices increased 0.2 percent, the first yearly increase since April 2012. Petroleum prices increased as well, rising 2.9 percent relative to last year, also the first yearly increase since April 2012. Nonpetroleum prices fell −0.5 on a yearly basis after falling −0.4 percent in May and −0.2 percent in both March and April. Although petroleum prices showed some firming relative to recent reports, weakness in the global economy continues to weigh down nonpetroleum import prices making June?s report similar to those in April, and May.

    Export prices fell −0.1 percent in June, marking four months of consecutive declines as well. On a year-over-year basis, export prices advanced 0.8 percent after falling in both May and April.

  • 06.27.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.0 percent in May, following declines in both March and April. On a year-over-year basis, the headline PCE price index is up 1.0 percent. Food and energy components had less of an impact on the headline index than they have had in previous months. The prices for energy goods and services increased 2.0 percent in May, while food prices decreased 3.0 percent. The core PCE price index, which excludes food and energy prices, increased 1.3 percent in for the month. This follows increases of 0.6 percent in March and 0.1 percent in April, while the 12-month percent change in the core PCE price index, which has been declining since late last year, was flat at 1.1 percent. The market-based core PCE price index, which also excludes most imputed prices, increased 1.3 percent in May following a 0.9 percent decline in April and is up 1.1 percent over the past 12 months.
  • 06.18.2013
  • CPI
  • Following two monthly declines driven largely by changes in energy prices, the CPI rose modestly in May by 0.1 percent. Energy prices in this report rose modestly as well, in contrast to the much more volatile swings of previous months in 2013. While gasoline prices were unchanged, increases in the indexes for electricity and natural gas accounted for the overall increase in the energy index. With less volatility in the energy index, the large weight on the CPI’s shelter component meant that its change dominated the move in the all-items index. According to the Bureau of Labor Statistics, more than half of the increase in the CPI in May was attributable to the shelter index, which rose 0.3 percent.

    Regarding changes in other CPI-based measures in May, the core CPI rose 0.2 percent, the Median CPI rose 0.2 percent, and the 16 percent trimmed-mean rose 0.1 percent during the month. On a year-over-year basis, the CPI rose 1.4 percent through May, up slightly from the 1.1 percent reading in April. Other year-over-year readings were stable. The core CPI rose 1.7 percent and the median CPI rose 2.1 percent on a year-over-year basis, both unchanged from April, while the 16 percent trimmed-mean rose 1.7 percent year-over-year, up from 1.6 percent in the previous month.

  • 05.31.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index fell at an annualized rate of 3.0 percent in April, which marks the second consecutive monthly decline in the index. Since April of last year, PCE prices have increased just 0.7 percent, as the year-over-year changes in the index have gradually declined since reaching 1.8 percent in October of 2012. For the second straight month, the decline in the price of energy goods and services, which is a volatile component of the price basket, was a major contributor to the monthly decline in PCE prices. The price index for energy goods and services fell 42.1 percent during April, and is down 4.2 percent since last year. The core PCE price index, which excludes food and energy prices, increased just 0.1 percent in April, following increases of 0.9 percent and 0.7 percent in February and March, respectively. On a year-over-year basis, core PCE prices have increased 1.1 percent. The 12-month percent changes in core PCE prices have gradually fallen since early last year, when the year-over-year change in core PCE prices reached 2.0 percent in March 2012. Since the beginning of 2013, however, 12-month percent changes have averaged just 1.2 percent. The market-based core PCE price index, which also excludes most imputed prices, decreased at an annualized rate of 1.0 percent, the first decline in this index since May of 2001. On a year-over-year basis, market-based core PCE prices have increased just 1.1 percent.
  • 05.15.2013
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods fell at an annualized rate of 7.7 percent in April, its second consecutive monthly decrease. On a year-over-year basis, the PPI is its April 2012 level. The greatest contributor to this decrease was a large drop in energy prices, decreasing by 3.2 percent. Producer prices for finished consumer foods in April decreased 0.8 percent from March. Excluding volatile food and energy prices, “core” PPI rose 1.8 percent year over year. At earlier stages of production, core intermediate good prices decreased 0.2 percent from April to March, and core crude prices less energy increased decreased 2.8 percent over the same period.
  • 05.14.2013
  • Import and Export Prices
  • Import prices decreased 0.5 percent in April after falling 0.2 percent in March and rising 0.9 percent in February. Similar to March, April’s falling petroleum prices (down 1.9 percent) were largely responsible for the headline decline. Nonpetroleum prices ticked down 0.1 percent as. On a yearly basis, import prices fell −2.6 percent marking six consecutive months of year-over-year losses. Petroleum prices dropped 9.5 percent year-over-year after dropping a revised 8.4 percent in March (10.4 percent, previously). Nonpetroleum prices fell −0.2 percent on a yearly basis. April’s report shows weakness akin to March with oil prices driving the decline. Import prices will likely remain weak in the months to come due to the soft global economy.
  • 04.29.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index fell at an annualized rate of 1.6 percent in March, following a 4.9 percent increase in February. The headline index has increased 1.0 percent since March of last year. The year-over-year changes in the headline PCE price index have been trending lower over the past few months, as 12-month percent changes averaged 1.2 percent in the first quarter of this year compared with averages of 1.5 and 1.6 percent in the third and fourth quarters of 2012, respectively. A 28.1 percent decline in the volatile price of energy goods and services pushed the headline index into negative territory. Excluding food and energy prices, “core” PCE prices increased 0.4 percent in March, following increases of 0.8 percent in February and 2.2 percent in January. Since March of 2012, the “core” PCE price index has increased 1.1 percent, which is the lowest year-over-year increase since March of 2011. The market-based “core” PCE price index, which also excludes most imputed prices, increased 0.7 percent in March following an increase of 1.3 percent in February, and has increased 1.3 percent over the last twelve months.
  • 04.16.2013
  • CPI
  • After rising sharply in February, the CPI fell 2.2 percent on an annualized basis in March. As in February, energy price changes contributed prominently to the change in the overall index. The energy index fell 27.5 percent in March, leading, in part, to the decline in the CPI and reversing its increase of nearly 90 percent in February. Two prominent energy components, motor fuel and fuel oil, which saw the largest price changes among our 45 components in February, experienced double-digit price declines in March.

    Excluding energy, the CPI rose 1.1 percent in March. Excluding both food and energy, the CPI rose 1.3 percent. These readings were in line with those from the Federal Reserve Bank of Cleveland’s (FRBC) measures. The Median CPI rose 1.1 percent in March, while the 16 percent trimmed-mean rose 0.7 percent. Notably, the apparent acceleration in the FRBC-based measures since December stopped in March. On a year-over-year basis, the FRBC measures and core CPI remain relatively stable and close to 2 percent, with the median CPI at 2.1 percent, the trimmed-mean at 1.7 percent, and the core CPI at 1.9 percent.

    While energy price changes have been an important part of the story in recent months, more subtle shifts have also taken place. In January, nearly half of the items in the CPI’s market basket (weighted by expenditures) experienced price changes in the range of 1 percent to 3 percent, with nearly equal proportions—about 25 percent—above and below this band. In February, however, more items in the market basket shifted toward the right tail of the distribution, with almost 45 percent of the CPI seeing price changes at or above 3 percent during the month. This reversed in March, with about 40 percent of the market basket experiencing price changes of less than 1 percent. Which is more indicative of the underlying price trend remains to be seen.

  • 04.12.2013
  • Producer Price Index
  • The Producer Price Index (PPI) fell at an annualized rate of 6.5 percent in March, following increases in February and January. On a year-over-year basis the PPI is still up 1.1 percent. Producer prices for finished consumer foods in March rose 9.9 percent following a decrease of 6.3 percent in February. Energy prices on the other hand sharply decreased 34.1 percent. Year-over-year energy prices decreased 1.9 percent since last March. Excluding volatile food and energy prices, “core” PPI rose 2.0 percent during the month and is up 1.7 percent year-over-year. At earlier stages of production, core intermediate good prices rose 2.5 percent and core crude prices increased 11.8 percent.
  • 04.11.2013
  • Import and Export Prices
  • Import prices decreased −0.5 percent in March after rising 0.6 percent in February and 0.5 percent in January. March’s decline was in line with expectations of consensus forecasters. Falling petroleum prices (down −1.9 percent) and falling nonpetroleum prices (down −0.1 percent) were responsible for the decrease in the overall index. On a year-over-year basis, import prices fell −2.7 percent, extending February’s yearly loss of −0.9 percent. March marks the fifth consecutive month of year-over-year declines. Petroleum prices dropped −10.4 percent, marking double-digit declines for the first time since July 2012. Nonpetroleum prices fell −0.2 percent year-over-year, the first decline since October 2012. After relatively strong import price reports in January and February, March’s read shows weakness similar to November’s and December’s reports. While oil prices contributed strength to January and February’s reports, their drop in March was a large driver of the weakness. Import prices will likely remain weak in the months to come due to the soft global economy.

    Export prices fell −0.4 percent in March after rising 0.8 percent in February and 0.4 percent in January. On a year-over-year basis, export prices advanced 0.3 percent.

  • 03.29.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 4.8 percent in February, following no change in December and an increase of 0.4 percent in January. Over the past twelve months, the headline PCE price index has increased 1.3 percent. The monthly increase in February was almost entirely driven by a jump in energy prices, a volatile component of the headline index, which increased at an annualized rate of 97.6 percent for the month. Excluding food and energy prices, the “core” PCE price index increased 0.7 percent, and has increased 1.3 percent since February of last year. The current three-month trend in year-over-year changes is 1.3 percent, which is slightly below the 1.5 percent average during the final three months of last year and the 1.7 percent average during all of 2012. The market-based “core” PCE price index, which also excludes most imputed prices, increased 1.5 percent in February, following increases of 0.6 percent in December and 2.8 percent in January, and has increased 1.4 percent over the last twelve months.
  • 03.14.2013
  • Producer Price Index
  • The Producer Price Index (PPI) rose at an annualized rate of 8.3 percent in February, only the second increase in five months. On a year-over-year basis the PPI is still up 1.7 percent. Producer prices for finished consumer foods in February fell 6.9 percent following an increase of 7.4 percent in January. On the other hand, Energy prices sharply increased 42.5 percent following four consecutive monthly declines. Year-over-year energy prices increased 1.1 percent since last February. Excluding volatile food and energy prices, “core” PPI rose 2.0 percent during the month and is up 1.7 percent year-over-year. At earlier stages of production, core intermediate good prices rose 8.4 percent (highest increase since March 2012) and core crude prices decreased 18.6 percent.
  • 03.01.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 0.3 percent in January, following declines of 1.8 and 0.2 percent in the two prior months. Since January of 2012, the headline PCE price index has increased just 1.2 percent, as the year-over-year changes have been trending downward since October. Slowing growth in the headline index was a 20.9 percent decline in the price of energy goods and services, a volatile component in that index. Energy prices declined each month from November through January, and are basically flat on a year-over-year basis. Food prices, another volatile component, were flat in January following 2.5 percent increases in both November and December, respectively, and have increased 1.0 percent since last January.

    Excluding food and energy prices, the “core” PCE price index increased 1.8 percent in January compared with an increase of 0.3 percent in December. The near-term (three-month) trend in monthly increases is 1.0 percent, slightly below the average monthly increase of 1.4 throughout 2012. On a year-over-year basis, “core” PCE prices have increased just 1.3 percent. The market-based “core” PCE price index, which also excludes most imputed prices, increased 2.6 percent in January, compared with increases of 0.6 and 0.3 in November and December, and has increased 1.4 percent since last year.

  • 02.26.2013
  • Home Price Indexes
  • All three headline S&P Case-Shiller housing price indexes posted strong annual gains. The national index, down 0.3 percent from the third to the fourth quarter of 2012, rose 7.3 percent since 2011:Q4. Meanwhile, the 10- and 20-city composites rose 5.9 percent and 6.8 percent, respectively in 2012:Q4. With annual growth rates of 9.9 percent and 13.6 percent, Atlanta and Detroit produced their largest year-over-year price changes since the index began in 1991. Home prices in Phoenix continue to soar, as they have risen for eight consecutive months and are up 23 percent since last December. Home prices are now back to mid-2003 price levels.

    The FHFA housing price index rose 1.4 percent from the third quarter to the fourth quarter, representing the third consecutive quarter of growing prices and a 5.5 percent increase since 2011:Q4. Of the nine census divisions, the Pacific division experienced the strongest increase in the latest quarter, posting a 4.2 percent price increase. House prices were weakest in the East North Central division, where prices remained unchanged from the prior quarter. The monthly index rose slightly, up 0.6 percent. However, this is the eleventh consecutive month of growth, showing a sign of sustained improvement. Overall, home prices are back to autumn 2004 price levels.

  • 02.21.2013
  • CPI
  • The headline CPI was flat in January, as falling energy prices offset increases elsewhere in the retail marketbasket. On a year-over-year basis, the CPI is now up 1.6 percent, softening from a growth rate of 2.2 percent back in October as energy prices have headed declined in recent months. Food prices were also a little soft in January, rising just 0.5 percent compared to its previous three-month annualized growth rate of 2.4 percent. However, that’s where the softness ends. Price increases were much more prevalent elsewhere in the index. Excluding food and energy prices, the “core” CPI jumped up 3.1 percent in January, breaking from its near-to-longer term trend. This was the first increase in the core CPI above 3.0 percent since August of 2011 and nearly double its prior three-month annualized growth rate of 1.6 percent. Despite January’s increase, the 12-month growth rate in the core CPI remained at 1.9 percent.

    Our measures of underlying inflation were also elevated relatively to their recent trends, but to a lesser degree. The median CPI rose 2.6 percent in January, compared to its near-term (three-month) growth rate of 2.2 percent and its year-over-year growth rate of 2.1 percent. The 16 percent trimmed-mean CPI increased 2.2 percent during the month, modestly above its year-over-year growth rate of 1.8 percent.

    As for the reason for January’s uptick in underlying inflation, the Bureau of Labor Statistics (BLS) pointed to increases in shelter (up 2.6 percent) and apparel prices (up 9.9 percent) as the impetus. However, there’s a little more to this story. The modestly above-trend rise in rents is nothing new, but an examination of the price change distribution reveals an upward shift away from the lower tail. In January, roughly one third of the overall index exhibited a price change of less than 2 percent, compared to roughly half of the index over the past three months. Some of that weight shifted toward the center of the distribution (rising at rates between 2 percent and 3 percent), but there was also a distinct increase in the amount of the index rising at rates in excess of 5 percent (15 percent in January, compared to an average of 9 percent over the past 3 months).

  • 01.31.2013
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index fell at an annualized rate of 0.6 percent in December, following a decline of 2.5 percent in November. On a year-over-year basis, the headline index is up 1.3 percent. The price of energy goods and services declined for the third straight month, dropping 14.6 percent, while food prices increased 3.2 percent in December, and have averaged increases of 3.2 percent over the past three months. Excluding food and energy prices, the “core” PCE price index increased 0.2 percent in December, after increases of 1.7 and 0.6 percent in November and October, respectively, and is up 1.4 percent over the past year. During the second half of 2012, the “core” PCE price index averaged monthly increases of 0.7 percent, compared with average monthly increases 2.0 percent during the first six months of the year. The market-based “core” PCE price index, which also excludes most imputed prices, increased 0.1 percent in December.
  • 01.29.2013
  • Home Price Indexes
  • In November the S&P Case-Shiller 10- and 20-city housing price indexes posted respective annual increases of 4.5 percent and 5.5 percent, and monthly declines of 0.2 percent and 0.1 percent. Annual figures where stronger in 19 cities in November when compared to October, and ten cities showed monthly gains in November compared to only seven in October. New York was the only city to post an annual decline in November, Cleveland was flat, and Phoenix led with an increase of 22.8 percent over the past 12-months, which is its seventh consecutive month of double-digit returns. While the winter months are typically a period of weakness in the housing market, strong annual returns suggest a growing momentum within the housing market, and national home prices are back to fall 2003 levels.

    From October to November the FHFA housing price index ticked up 0.6 percent to an index level of 192.2, representing a 5.6 percent increase since last November and the highest index level since May 2010. Regionally, all areas posted moderate annual gains and only two areas posted monthly declines: East North Central, down 1.0 percent and East South Central, down 0.4 percent. The Mountain division showed the strongest improvements to home prices both monthly and annually, up 2.1 percent and 14.8 percent, respectively. Overall, national home prices are back to mid-2004 index levels.

  • 01.15.2013
  • Producer Price Index
  • The Producer Price Index (PPI), slipped down at an annualized rate of 2.4 percent in December, its third consecutive decline. In contrast to the previous two months, the overall decline was largely due to a decline in finished consumer foods, which fell 10.6 percent in December (though this was after a 17.3 percent gain in November). Energy prices still declined, falling 3.1 percent, though much less severely than in November (down 43 percent). Over the past 12 months, the PPI is up a mere 1.3 percent, well below its long-run (10-year) annualized growth rate of 3.4 percent. Excluding volatile food and energy prices, the “core” PPI edged up 0.7 percent during the month and is roughly flat over the past three months, decelerating markedly from its year-over-year growth rate of 2.0 percent. At earlier stages of production, price pressure was relatively modest with core intermediate goods prices rising 2.5 percent and volatile core crude prices increasing 14.6 percent.
  • 01.11.2013
  • Import and Export Prices
  • Import prices edged down −0.1 percent in December after falling −0.9 percent in November. December’s decline marks the second consecutive month of losses and deviates sharply from the 0.1 percent gains predicted by consensus forecasters. Nonpetroleum import prices ticked up 0.1 percent and were offset by falling petroleum prices which fell −0.8 percent. On a year-over-year basis, import prices extended last month’s decline falling −1.6 percent. Petroleum prices drove the drop of the overall index, plummeting 7 percent on a yearly basis to mark eight months of the consecutive declines. Nonpetroleum import prices stayed relatively flat in December edging up 0.1 percent after posting 0.1 percent gains in November and 0.1 percent declines in October. Like November’s import price report, December’s exhibits much of the weakness stemming from the sluggish global economy.

    Export prices ticked down −0.1 percent after falling −0.7 percent in November and posting gains throughout the third quarter. On a year-over-year basis, export prices increased 1.0 percent marking the third consecutive month of gains.

  • 12.21.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index fell at an annualized rate of 2.6 percent in November, following increases of 3.9 percent in September and 1.5 percent in October. Over the past twelve months, the headline index is up 1.4 percent. Excluding food and energy prices, the “core” PCE price index increased 0.5 percent in November, as a drop in the price of energy goods in services, which declined 41.7 percent during the month, pushed the headline index into negative territory. Over the last three months, “core” PCE prices have increased at an average rate of 0.9 percent, below the second quarter average month-to-month increases of 1.6 percent but a bit higher than average increases of 0.6 percent during the third quarter. Over the past year, the “core&rdquo PCE price index has increased 1.5 percent. The market-based “core&rdquo PCE price index, which also excludes most imputed prices, increased 0.4 percent in November, following increases of 0.9 and 1.5 percent in September and October, respectively, and is up 1.6 percent over the past twelve months.
  • 12.14.2012
  • CPI
  • The CPI fell at an annualized rate of 3.7 percent in November, as falling gasoline prices more than offset modest increases elsewhere in the retail marketbasket (and overran the sharpest increase in energy services prices since March 2010). Over the past 12 months, the CPI is up 1.8 percent, down 0.4 percentage points from October’s figure. Food prices rose 2.7 percent in November, nearly identical to October’s gain, and are up 1.8 percent over the past year. Excluding food and energy prices, the (“core”) CPI rose 1.4 percent in November, slightly softer than its near-term (three-month) annualized growth rate of 1.8 percent and its 12-month growth rate of 1.9 percent. Our measures of underlying inflation—the median CPI and the 16 percent trimmed-mean CPI—rose 2.3 percent and 1.6 percent, respectively. Both measures are running a little north of the trend in the core CPI over the past three months, with the trim increasing 2.0 percent and the median up 2.4 percent. Over the past 12 months the median CPI has risen 2.2 percent, while the 16 percent trimmed-mean CPI has increased 1.9 percent. The 12-month growth rate in the median CPI hasn’t changed much from the start of the year (slipping just 0.2 percentage points), while the growth rate in the 16 percent trimmed-mean has fallen from roughly 3/4 of a percentage point since January. Some of that relatively elevated near-term trend in the trimmed-mean measures has to do with rising homeowners’ equivalent rent, which increased 2.4 percent in November, and are up 2.6 percent over the past three months (rent of primary residence is up 3.6 percent over the past three months). Still, the influence from rents on the year-over-year growth rate in the median CPI is relatively minor—just 0.1 percentage point.
  • 11.30.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.5 percent during October. This follows increases of 4.3 percent in August and 4.1 percent in September, and over the past year, the headline PCE price index is up 1.7 percent. The price of energy goods and services, which is a volatile component of the overall index, but has pushed up the headline number over the past few months, decreased 2.1 percent in October. This follows increases of 96.2 percent and 75.6 percent in August and September, respectively. Excluding food and energy prices, the “core” PCE price index increased 1.6 percent for the month, and is also up 1.6 percent since October of last year. This is roughly in line with the current near-term (three-month) trend in year-over-year changes, but a bit lower than average 12-month increases of 1.9 percent during the first quarter and 1.8 percent during the second quarter of this year. The market-based “core” PCE index—which excludes most imputed prices—increased 1.6 percent in October as well, and is up 1.7 percent. over the last twelve months.
  • 11.27.2012
  • Home Price Indexes
  • The S&P Case-Shiller National Home Composite index rose 3.6 percent in the third quarter of 2012 versus the third quarter of 2011, and was up 2.2 percent compared to the second quarter of 2011—this marks the sixth consecutive month of increasing prices. In September, the 10- and 20-city composites showed annual improvements of 2.1 percent and 3.0 percent. On a monthly basis, prices edged up 0.3 percent and 0.4 percent, respectively for the 10- and 20-city composites, which is the eighth consecutive month that both indexes have risen. Eighteen of the MSAs saw positive annual returns, while fifteen cities saw positive monthly increases. Cleveland was amongst the cites which posted monthly declines, down 0.9 percent, but remains up 1.4 percent compared to this time last year. Nationally, prices are back to their mid-2003 levels.

    The FHFA Housing price index rose a seasonally adjusted 1.1 percent from the second to third quarter of this year. Compared to the third quarter of 2011 homes prices rose 4.0 percent; however, after adjusting for inflation home prices increased just 2.5 percent. On a monthly basis, home prices edged up 0.2 percent. Throughout the nation, annual price changes continue to show the strongest improvements in the Mountain region, up 10.3 percent, and the weakest in the New England region, down 0.5 percent. Overall the September index level is now back to mid-2004 levels.

  • 11.15.2012
  • CPI
  • The headline CPI rose at an annualized rate of 1.8 percent in October, as gasoline prices posted a modest decrease and general price pressure elsewhere in the retail marketbasket was fairly tame (though rents did post sizeable increases). On a year-over-year basis the headline CPI is up 2.2 percent. Excluding food and energy prices, the “core” CPI rose 2.2 percent during the month, outpacing its near-term (three-month) growth rate of 1.5 percent, though it came in relatively close to its year-over-year growth rate of 2.0 percent. Our measures of underlying inflation, the median CPI and 16 percent trimmed-mean CPI, rose 2.3 percent and 1.7 percent, respectively. Over the past year, the median is up 2.2 percent, while the trim is up 1.9 percent. However, there does appear to be an upward nudge on October’s data stemming from rising shelter costs.

    Shelter prices jumped up 3.2 percent in October, its sharpest monthly increase since March 2008. A significant chunk of this was rent of primary residence, which spiked up 5.1 percent in October, well above its 12-month trend of 2.8 percent. Also, owners’ equivalent rent (OER) rose 2.6 percent in October. OER has accelerated over the past three months, up 2.8 percent compared to its 12-month growth rate of 2.1 percent. Shelter costs comprise a little over 30 percent of the marketbasket (with OER accounting for roughly 25 percent alone) and have the propensity to influence the measured underlying inflation trend. As evidence of this, perhaps undue influence on our read of inflation, excluding OER from our trimmed-mean calculations pulls October’s increase in the median CPI down from 2.3 percent to a mere 0.4 percent increase. This is a marked difference from the recent trend. Over the prior three months, the median CPI excluding OER rose 2.3 percent, and is up 2.2 percent over the past year, numbers that lie nearly on top of the median CPI. The effect of excluding OER from the 16 percent trimmed-mean CPI nudges it’s increase down from 1.7 percent to 1.3 percent in October. The latter effect is roughly in line with that of the sticky CPI, which rose 2.4 percent in October and 1.9 percent after excluding shelter prices.

  • 10.31.2012
  • Employment Cost Index
  • Employer costs of compensation for civilian workers rose 0.4 percent (nonannualized) in the third quarter, following a 0.5 percent increase in the second quarter. The wages and salary component also increased 0.4 percent, in line with the second quarter’s 0.4 percent advance. The benefits component rose 0.8 percent in the third quarter. Year-over-year, civilian compensation advanced 1.9 percent in the third quarter and has averaged 1.9 percent since the recession ended. Civilian wages and salaries increased 1.7 percent over the past twelve months while benefits rose 2.6 percent. Year-over-year, private compensation grew 1.9 percent and has averaged 1.9 percent since the recession ended. Private wages and salaries increased 1.9 percent from the same time last year while benefits grew 2.4 percent. Looking across private industry groups, information posted the largest increase, 3.7 percent, while leisure and hospitality increased 0.8 from last year.
  • 10.29.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 4.7 percent in September, following an increase of 5.0 percent August, and is up 1.7 percent over the last twelve months. The headline PCE price index has been trending upwards over the past few months primarily due to jumps in the price of energy goods and services, a volatile component of the overall index, which increased 96.7 percent (annualized) in August and 75.3 percent in September. Excluding food and energy prices, the “core” PCE price index increased 1.4 percent in September, slightly above the near-term (three-month) trend of 1.1 percent. “Core” PCE prices increased 1.0 percent in August, and are up 1.7 percent since September of 2011. The market-based “core” PCE index—which excludes most imputed prices—increased at a rate of 0.9 percent in September, following increases of 1.0 percent and 0.6 percent in July and August, respectfully, and is up 1.7 on a year-over-year basis.
  • 10.16.2012
  • CPI
  • The headline CPI jumped up at an annualized rate of 7.1 percent in September, nearly matching its August gain of 7.5 percent. Again, spiking gasoline prices accounted for the lion’s share of the overall increase. Price increases were modest elsewhere in the retail marketbasket. Food prices rose just 0.7 percent in September and, excluding food and energy components, the index rose 1.8 percent. Measures of underlying inflation produced by the Cleveland Fed continued to point toward a somewhat firmer near-term inflation trajectory. The median and 16 percent trimmed-mean measures both increased 2.6 percent in September, in line with the three-month annualized growth rate in the median CPI (of 2.6 percent), but slightly higher than that of the trim (1.9 percent). Increases in rent of primary residence (up 3.5 percent in September) and rising owners’ equivalent rent (up 2.7 percent) continue to provide an upward nudge to the median, but are not the entire cause of it’s “on target” trend. Evidence of this can be seen in tracking slower-moving retail prices. The “sticky” CPI excluding shelter rose 2.1 percent in September and are up 2.2 percent over the past year. Perhaps the most important aspect of today’s release is that every measure of inflation that we track is trending within a few basis points of each other. The headline and “core” CPI are up 2.0 percent over the past year; the median is up 2.3 percent; and the 16 percent trimmed-mean is up 1.9 percent.
  • 10.12.2012
  • Producer Price Index
  • Producer prices, as measured by the Producer Price Index (PPI), jumped up at an annualized rate of 14.4 percent in September, following a sharp 22 percent spike in August. The recent upward pressure on the overall PPI is almost entirely due to energy price spikes (the series is up 91.4 percent on an annualized basis). The only other source of modest upward pressure is from price increases in finished consumer foods—up 11.5 percent in August and 4.9 percent in September. Still, on a year-over-year basis the PPI is up 2.1 percent. Excluding food and energy prices, the “core” PPI was flat in September, and has been much more muted over the past three months—rising just 2.7 percent. Over the past 12 months, the core PPI is up 2.3 percent and has fallen nearly a full percentage point since the start of the year. Further back on the assembly line, pricing pressure was to the upside (though these series are extremely noisy). Core intermediate goods prices rose 7.1 percent in September, while core crude goods prices rose 20.6 percent.
  • 09.28.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 5.3 percent during August, following increases of 1.0 percent in June and 0.4 percent in July, and is up 1.5 percent over the last twelve months. This is the largest one-month increase in the PCE price index since May of 2009, and it pulls the 3-month trend in annualized monthly changes up from −0.3 percent to 2.3 percent. The primary cause of the spike in August was an increase in the price of energy goods and services, a highly volatile series, which jumped 96.1 percent (annualized) during the month. The “core” PCE price index—which excludes food and energy—increased just 1.3 percent in August, following an increase of 0.7 percent in July, and is up 1.6 percent since August of 2011. The short-term (3-month) trend in year-over-year changes for “core” PCE prices has come down a bit since the beginning of the year, as it is currently at 1.7 percent compared with average growth rates of 1.9 and 1.8 percent for the first and second quarter, respectively. The market-based “core” PCE index—which excludes most imputed prices—increased 1.9 percent for the month, after increasing 1.0 percent in July, and is up 1.8 percent over the last twelve months.
  • 09.25.2012
  • Home Price Indexes
  • From June to July, the S&P Case-Shiller home price indexes improved a seasonally-adjusted 0.42 percent for the 10-city index and 0.4 percent for the 20-city index. This is the third consecutive month that all 20 cities have recorded positively monthly changes and the sixth consecutive month for both indexes. On an annual basis both the 10- and 20-city indexes improved the highest levels since late 2010, showing growth of 0.57 percent and 1.14 percent, respectively over the past 12-months. Compared to July 2011, fifteen of the 20 MSAs posted better annual growth rates, two MSAs saw no change and three MSAs including Cleveland saw their annual rates worsen.

    The FHFA housing price index rose a seasonally adjusted 0.2 percent in July after downwardly revising the June estimate. Over the past 12-months the index rose 3.7 percent, showing positive annual growth for the sixth consecutive month. Regionally, prices ranged from an 11.9 percent increase in the Mountain region to a 1.4 percent decrease in the New England region. Overall housing prices are back to mid-2004 index levels.

  • 09.14.2012
  • CPI
  • The headline CPI jumped up at an annualized rate of 7.5 percent in August, its largest monthly increase since June 2009, pushing its 12-month growth rate up from 1.4 to 1.7 percent. However, as noted in the release, roughly 80 percent of this overall increase was due to spiking gasoline prices. Elsewhere, there were some distinct signs of softness in the market basket, though there’s some disagreement between different measures of underlying inflation on how much. Excluding food and energy prices, the “core” CPI rose a mere 0.6 percent in August, slowing from a 1.1 percent increase in July and a 2.5 percent increase in June. Over the past 3 months, the core CPI is up just 1.4 percent, moderately softer than its 12-month growth rate of 1.9 percent. Alternative underlying inflation measures—the median CPI and 16 percent trimmed-mean CPI—came in much higher than the core CPI in August. The median CPI rose 2.8 percent, while the trim was up 2.0 percent in August.

    As was the case last month, the rents (OER and rent of primary residence) are on the upswing, and given their enormous size (roughly 30 percent) relative to the rest of the market basket, are making it harder to disentangle the inflationary signal from noise. Rent of primary residence rose 2.3 percent in August and OER jumped up 3.1 percent (its largest monthly increase since late 2008). Even though we use the regional OER components to calculate the median CPI, given their still sizeable weight and relatively slow-moving nature, they are frequently the median component (five out of the eights months of this year so far). It appears to be a major contributor to the reason the year-over-year growth rate in the median CPI is still hanging in at 2.3 percent. The 12-month growth rate in the trimmed-mean CPI actually nudged down to 1.9 percent in August, in line with the core CPI.

    After stripping away shelter prices from the core CPI, the index actually declined in August, slipping down 0.8 percent, its first decrease since late 2008. Echoing some of this disinflationary signal, the sticky CPI increased 1.6 percent in August, though after excluding shelter prices rose just 0.6 percent. Both the sticky CPI and sticky CPI ex shelter are up 2.2 percent over the past year, which is slightly below their respectively longer-run (10 year) averages. On the other hand, there was some evidence of a seasonal adjustment issue in another “sticky” priced component—education services—that may be pulling down these exclusionary core measures a little too far. The price index for education services (which comprises roughly 3.0 percent of the overall index, but that gets amplified when you exclude food, energy, and shelter components) fell 1.8 percent in August on the heels of a sharp 6.8 percent increase in July--a pattern that has been repeated itself since the end of the last recession.

  • 09.13.2012
  • Producer Price Index
  • Producer prices, as measured by the Producer Price Index (PPI) jumped up at an annualized rate of 21.9 percent in August, following a modest 3.2 percent increase in July. August’s spike was driven largely by a significant jump in finished energy goods prices (up 110 percent at an annualized rate). A less dramatic, though still sizeable increase in prices for finished consumer foods (up 10.8 percent) also contributed to overall jump in producer prices in August. Excluding food and energy components, prices elsewhere in the index rose much more modestly in August, increasing 2.7 percent compared to a 5.4 percent increase in July. On a year-over-year basis, the PPI excluding food and energy is up 2.6 percent, a little over a half a percentage point above the growth rate in the overall index. Pricing pressure was mixed further back on the line of production, as core intermediate goods prices slipped down 2.5 percent and core crude goods prices rose 29.8 percent in August.
  • 08.30.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index was nearly flat in July, increasing at an annualized rate of just 0.1 percent. This follows an increase of 1.3 percent in June and a drop of 2.3 percent in May, as the headline index is up 1.3 percent since July of last year. The “core” PCE price index—which excludes food and energy prices—increased just 0.4 percent for the month, much lower than the average growth over the three prior months of 1.8 percent, and is the lowest monthly change since December of 2010. On a year-over-year basis, “core” PCE prices were up 1.6 percent in July, following increases of 1.8 percent in both May and June. The market-based “core” PCE price index—which excludes most imputed prices—increased 0.6 percent in July compared with monthly increases of 1.9 and 2.3 percent in May and June, respectively, and is up 1.7 percent since July of 2011.
  • 08.15.2012
  • CPI
  • The headline CPI was virtually flat for the second consecutive month, rising at an annualized rate of just 0.6 percent in July, as decreasing energy prices offset modest increases elsewhere in the basket. On a year-over-year basis, the CPI is up 1.4 percent, down sharply from its growth rate a year ago of 3.6 percent. Excluding food and energy prices, the “core” index rose just 1.1 percent in July, compared to increases of 2.5 percent in June and 2.4 percent in May. The softness in July was a enough to pull down its 3-month growth rate from 2.6 percent to 2.0 percent. Over the past year, the core CPI is up 2.1 percent. A dig into the price change distribution reveals a significant amount of mass gathering in the lower tail. 20 components comprising almost a third of the retail marketbasket (by expenditure weight) exhibited outright price declines in July, starkly contrasting the average weight of 20 percent in the lower tail through the first half of this year. However, some of the component price swings in that lower tail appear to be unusually large. For example, electricity prices fell by 14.8 percent in July, its largest monthly decline since February 1998. Communication prices fell more than 5.0 percent for only the third time in the last five years, sliding down 6.1 percent during the month. Also, the price index for lodging away from home plummeted 25 percent in July, its sharpest monthly decline since April 2008, but this series is inherently volatile and frequently exhibits price swings in excess of plus or minus 10 percent. The median CPI rose 2.5 percent in July, but the 16 percent trimmed-mean CPI increased just 1.3 percent. On a year-over-year basis, the median CPI is up 2.3 percent, while the 16 percent trimmed-mean CPI is up 2.0 percent. Rents were the primary cause of the disparity in July. Contrasting the softness elsewhere in the marketbasket, rents continued to increase (and OER for the Northeast urban region was the median component). Rent of primary residence jumped up 3.8 percent in July, and is up 2.8 percent over the past year. Owners’ equivalent rent (OER) rose 2.1 percent during the month, compared to its growth rate over the previous 3 months of 1.5 percent.
  • 08.14.2012
  • Producer Price Index
  • Producer prices, as measured by the Producer Price Index (PPI), increase at an annualized rate of 3.2 percent in July, contrasting a string of subdued readings that has left the series’ 12-month growth rate at just 0.5 percent, compared to its 10-year trend of 3.3 percent. Energy prices continued to trend down, though food prices jumped 6.2 percent in July. Excluding food and energy prices, the index rose 5.4 percent in July, its largest monthly gain since January. Still, on a year-over-year basis, the PPI excluding food and energy is up 2.6 percent, down slightly from a recent high of 3.1 percent in January. There was a dearth of pricing pressure further back on the line of production, as core intermediate and core crude goods prices fell sharply (−10.6 percent and −12.9 percent, respectively).
  • 08.10.2012
  • Import and Export Prices
  • Import prices continued their downward trajectory, falling 0.6 percent in July after plummeting 2.4 percent last month. July marks the fourth consecutive month of declining import prices. Continued decreases in import prices indicate that foreign prices have the potential to exert downward pressure on domestic prices in the coming months. Lower import prices could also contribute to lower import totals as well. Both lower petroleum and nonpetroleum prices contributed to the decrease in the overall index. Petroleum prices fell 1.6 percent after falling 9.3 percent last month. On a yearly basis, petroleum prices fell 12.3 percent, the largest drop since October 2009. Nonpetroleum prices fell by 0.3 percent from June to July and declined by 0.5 percent from July of last year. The overall import price index continued to fall on a yearly basis for the third consecutive month posting losses of 3.2 percent.

    Export prices increased by 0.5 percent in July after declining in June and May. Nonagricultural prices declined 0.3 percent partially offsetting the 6.4 percent increase in agricultural prices. On a year-over-year basis, export prices fell 1.2 percent, posting losses for the third consecutive month.

  • 07.31.2012
  • Home Price Indexes
  • On a yearly basis, existing home prices declined. The 10-city composite is down 1 percent from last year, compared with a 2.2 percent decrease last month. The 20-city composite index is down just 0.7 percent. Without seasonal adjustments, both indexes gained 2.2 percent. Without seasonal adjustments, gains for both indexes where at 0.9 percent.

    The FHFA housing price index rose 0.8 percent in May after a 0.1 downward revision to April’s estimate. On an annual basis home prices have increased 3.7 percent since last May, but remain 17.0 percent below the April 2007 peak. Regionally, monthly price changes ranged from a 1.7 percent increase in the Pacific division to a 1.0 percent decline in the West South Central division. Over the past 12-months regional price changes range vary from being flat in the New England division to a 6.3 percent increase in the Mountain division.

  • 07.31.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 1.3 percent in June following a drop of 2.2 percent in May, and is up 1.5 percent since last year. The quarterly average annualized percent change in the headline index dropped from 3.3 percent during the first quarter to -0.3 percent during the second quarter caused primarily by May’s decline. The “core” PCE price index—which excludes food and energy prices—increased 2.5 percent in June, following an increase of 1.4 percent in May. This pulls the near-term (3-month) trend in “core” PCE prices up slightly from 1.7 to 1.8 percent, which is still below the first quarter average of 2.3 percent. On a year-over-year basis, “core” PCE prices are up 1.8 percent. The market-based “core” PCE price index—which excludes most imputed prices—increased 2.2 percent during June, following an increase of 1.8 percent in May, and is up 1.8 percent over the past year.
  • 07.17.2012
  • CPI
  • The headline CPI was virtually flat in June, rising at an annualized rate of just 0.5 percent in July, as falling energy prices offset increases elsewhere in the marketbasket. The year-over-year growth rate in the headline CPI remained at 1.7 percent in June. Food prices rose 2.1 percent during the month, and we have yet to see any effects from spiking corn prices (cereal and bakery products fell 4.9 percent in June). Excluding food and energy prices, the “core” CPI rose 2.5 percent in June, in line with its near-term (three-month annualized) growth rate of 2.6 percent, and ran slightly ahead of its longer-term (12-month) growth rate of 2.2 percent. Our underlying inflation measures—the median and 16 percent trimmed-mean CPI—came in softer than the core CPI in June, rising 1.5 percent and 1.9 percent, respectively. On a year-over-year basis, the median is up 2.3 percent and the trim is up 2.2 percent. The disagreement in June between the core CPI and our trimmed-means is due to the influence of a few relatively large categories on the core CPI. The first was a huge price spike in medical care services prices, jumping up 9.1 percent in June which is its largest price increase since May 1993. The series (which comprises roughly 5 percent of the marketbasket) is now up 4.3 percent on a year-over-year basis. Our trimmed-mean measures treated this unusually large price spike as noise, excluding it from the calculation in June, whereas it was included in the core CPI calculation. A couple of other sizeable components were excluded from the trim in June: lodging away from home (up 11.2 percent) and footwear (up 14.1 percent). Most of the components excluded from the trim on the other side of the distribution were food and energy items (except for a 20 percent drop in public transportation prices, but that was likely related to the drop in fuel prices). This exacerbated the difference between the core CPI and median.
  • 07.13.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment continued to wane in early July, falling 1.2 index points to 72.0 during the month. Sentiment had reached as high as 79.3 back in May, but has plummeted 7.3 points over the past two months. That said, the index is still well above its recent low of 55.8 seen last August. Respondents’ collective judgment over current economic conditions actually improved in July—rising to 83.2 from 81.5 in June. However, the consumer expectations component slipped down 3 points to 64.8, its lowest level since last December. Year-ahead median inflation expectations slipped down 0.3 percentage points to 2.8 percent in July (its lowest level since October 2010), likely on falling gas prices. Longer-term (five-to-ten years ahead) inflation expectations remained at 2.8 percent during the month.
  • 07.13.2012
  • Producer Price Index
  • Producer prices, as measured by the Producer Price Index (PPI), continued to ebb in June, rising at an annualized rate of 0.6 percent in June. Over the past year, the PPI is up just 0.8 percent, compared to its 10-year growth rate of 3.3 percent. Energy prices fell sharply in June (down 10.6 percent), while food prices nearly reversed a 6.5 percent decline in May, rising 6.3 percent in June. Excluding food and energy prices, the index rose 2.7 percent, following three consecutive months of 2.0 percent increases. On a year-over-year basis, the PPI excluding food and energy is up 2.6 percent, down slightly from a recent high of 3.1 percent in January. There was a dearth of pricing pressure further back on the line of production, as core intermediate and core crude goods prices fell sharply (−8.3 percent and −38.8 percent, respectively).
  • 07.12.2012
  • Import and Export Prices
  • U.S. import prices tumbled 2.7 percent in June after falling 1.2 percent in May (1.0 percent, previously). June marks the third consecutive month of declines and the largest monthly drop since December 2008. Both lower petroleum and nonpetroleum prices contributed to the overall all decrease in import prices indicating that foreign prices have the potential to exert downward pressure on domestic prices in the coming months. Petroleum prices plummeted 10.5 percent on a monthly basis—the biggest drop since December 2008—and slid 10.7 percent on a year-over-year-basis. Nonpetroleum prices fell by a more modest 0.34 percent month-over-monthly. On a year-over-year basis, nonpetroleum import prices edged down 0.17 percent marking the first decrease since December 2009. After falling 0.5 percent in May, the overall import price index continued to slide on a year-over-year basis posting 2.6 losses in June.

    Export prices declined by 1.7 percent in June after falling 0.5 percent in May (0.4 percent, previously). Both agricultural prices and nonagricultural price fell, the former plunging 4.0 percent and the later declining 1.4 percent. On a year-over-year basis, export prices decreased by 2.1 percent after falling 0.2 percent last month.

  • 06.29.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index fell at an annualized rate of 2.2 percent in May, brought down by a relatively sharp decrease in energy prices (−43.4 percent annualized rate). On a year-over-year basis, the headline PCE price index has edged down to 1.5 percent, its slowest growth rate since January 2011. Excluding volatile food and energy prices, the “core” PCE price index rose 1.4 percent in May, following a 1.7 percent increase in April. The near-term (three-month annualized growth rate) in the core index has softened a bit—from 2.4 percent in March to 1.8 percent currently. On a year-over-year basis, the series is up 1.8 percent.
  • 06.13.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods decreased at an annualized rate of 11.7 percent in May following a 2.4 percent decline in April. Dragged down by sharp decreases in energy prices over the past three months (and a 6.5 percent decrease in foods prices in May), the year-over-year growth rate in the headline PPI has slowed from 4.1 percent in January to just 0.7 percent as of May. Excluding food and energy prices, the “core” PPI rose 2.0 percent in May, matching its increase in April, and is now up 2.7 percent over the past year. Further back on the production line, pricing pressure was to the downside, as core intermediate goods prices slipped down 2.4 percent and volatile core crude goods prices fell 15 percent in May.
  • 06.12.2012
  • Import and Export Prices
  • U.S. import prices fell 1.0 percent in May after remaining unchanged in April (down 0.5 percent before revisions). Both lower petroleum and nonpetroleum prices contributed to the decline meaning that weaker foreign prices have the potential to weigh on the domestic price level in the coming months should the downward movements persist. Petroleum prices fell 4.2 percent marking the largest monthly decline in two years while nonpetroleum prices edged down 0.1 percent. On a year-over-year basis, import prices fell 0.3 percent, the first yearly decline since October 2009. Petroleum prices (down 2.0 percent) also turned negative for the first time since the second quarter of 2009. Despite nonpetroleum prices remaining in positive territory, May’s 0.3 percent yearly advance is the smallest gain since the fourth quarter of 2009.

    Export prices fell 0.5 percent in May after rising 0.4 percent in April. Although agricultural prices rose 0.7 percent, nonagricultural prices fell by 0.5 percent contributing to the decline in the overall export index. On a year-over-year basis, export prices ticked down 0.1 percent, also decreasing for the first time since October 2009.

  • 06.01.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 0.2 percent in April, following a 2.5 percent increase in March, and much lower than the first quarter average of 3.1 percent. The headline index was up 1.8 percent on a year-over-year basis. The “core” PCE price index—which excludes food and energy prices—was up 1.6 percent in April after increasing 1.8 percent in March. The divergence between the headline and “core” measures was caused primarily by a decrease in the energy goods and services index of 19.6 percent in April, which would be reflected in the headline measure and not the “core” measure. Since last April, “core” PCE prices are up 1.9 percent, which roughly matches the year-over-year percentage gains in each of the last five months. The market-based “core” PCE price index—which excludes most imputed prices—increased at an annualized rate of 1.5 percent, following an increase of 1.8 percent in March, and was up 1.9 percent over last year.
  • 05.25.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment rose to an index level of 79.3, up from May’s preliminary reading of 77.8. Although May marks the highest index level since October 2007, the index still trails its 88.9 average during the previous expansion (November 2001–December 2007). The 1.5 gain in the index was largely driven by households with incomes over $75,000 (up 5.5 points) who expect to see larger increases in their incomes in the year ahead. Lower income households were less optimistic, posting modest gains of 0.8. The expectations component increased from 71.7 to 74.3, also contributing to May’s improvement. The current conditions component retreated slightly from 87.3 to 87.2 after jumping 4.4 index points from April to May. Median short-run (one-year ahead) inflation expectations were adjusted down from 3.1 percent to 3.0 while the longer-term (five-to-years ahead) inflation expectations dropped from 3.0 to 2.7 percent, returning to levels seen during the fourth quarter of 2011.
  • 05.15.2012
  • CPI
  • The headline CPI was flat in April, as gasoline prices fell at an annualized rate of 27 percent following three consecutive increases. The price index for foods rose a modest 2.6 percent clip in April, below its 12-month growth rate of 3.1 percent . On a year-over-year basis, the headline CPI is up 2.3 percent through April, a trend that has fallen precipitously since a recent high of 3.9 percent last September. Excluding food and energy prices, the (“core”) CPI rose 2.9 percent in April, and is up 2.3 percent over the past 12 months. Interestingly, this is the first month since October 2009 that the longer-term (12 month) trend in the headline CPI has been at or below the trend in the core CPI. Our measures of underlying inflation came in a little softer than the core CPI in April; with the median CPI rising 2.3 percent and the 16 percent trimmed-mean CPI up 1.9 percent during the month. Relative to their respective 12-month trends (which are 2.4 percent for the median and 2.3 percent for the trim), the recent trajectory has been roughly flat.
  • 05.11.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods decreased at an annualized rate of 2.4 percent in April, following a flat reading in March. Falling energy prices (down 15.4 percent) were a large part of the headline dip. Prices for finished consumer foods rose 2.5 percent, and excluding food and energy, the PPI rose 2.0 percent in April. On a year-over-year basis, the headline PPI is up 1.9 percent, which is below its longer-term (20-year) growth rate of 2.3 percent. Excluding food and energy prices, the “core” PPI is up 2.7 percent over the past year, and is up 2.5 percent over the past three months. Further back on the production line, pricing pressure was mixed, as core intermediate goods prices rose a modest 2.5 percent, and volatile core crude goods prices fell 19.5 percent in April after a 14 percent increase in March.
  • 05.11.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment edged up in early May, rising from an index value of 76.4 in April to 77.8. As a result, overall sentiment is at its highest level since January 2008, but still remains well below its average over the previous expansion (November 2001 to December 2007) of 88.9. All of May’s improvement in overall sentiment was driven by respondents’ collective judgment of current conditions—which pushed that index up from 82.9 to 87.3. The consumer expectations component actually retreated a little in May, slipping from 72.3 in April to 71.7. Median short-run (one-year ahead) inflation expectations ticked down from 3.2 percent in April to 3.1 percent in May, holding just 0.1 percentage point above longer-term (five-to-ten years ahead) inflation expectations (which were nudged up from 2.9 percent to 3.0 percent in May).
  • 04.30.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 2.5 percent in March, following an increase of 3.9 percent in February. The 3-month annualized growth rate increased from 2.5 percent to 3.1 percent, and the index was up 2.1 percent since March of last year. The “core” PCE price index—which excludes food and energy prices—was up 1.9 percent in March after increases of 2.8 percent in January and 1.7 percent in February. On a year-over-year basis, “core” PCE was up 2.1 percent compared with year-over-year changes of 1.9 percent in each of the prior three months. The market based “core” PCE price index—which excludes most imputed prices—increased at an annualized rate of 1.9 percent, following an increase of 1.6 percent in February, and has increased 2.0 percent since last year.
  • 04.27.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up from the initial April report, increasing from 75.7 to 76.4. This is a slight improvement from March’s index level of 76.2. The current conditions component was responsible for the upward revision, as it was changed from 80.6 to 82.9. The consumer expectations component was revised down slightly from 72.5 to 72.3. Median short-run (one-year ahead) inflation expectations were adjusted down from 3.4 percent to 3.2 percent. This is a drop off of 0.7 percentage points from March, and is 1.4 percentage points below expectations in April of last year. Longer-term (five-to-ten years ahead) inflation expectations were revised down slightly from earlier in April, going from 3.0 percent to 2.9 percent.
  • 04.24.2012
  • Home Price Indexes
  • On a seasonally-adjusted monthly basis the 10- and 20-city S&P Case-Shiller housing price indexes rose 0.1 percent and 0.2 percent, respectively. Annually, the 10-city composite fell 3.6 percent and the 20-city composite fell 3.5 percent, both of which are improvements over January’s annual figures. Neither index has seen a positive annual rate of change since the fall of 2010. Although five of the 20 MSAs posted positive annual returns, both indexes and nine MSAs, including Cleveland (down 4.4 percent), hit new post-crisis lows. Overall the 20-city composite is back to late 2002 levels and the 10-city composite is back to early 2003 levels.

    After a downward revision to January’s figures, the FHFA housing price index rose 0.3 percent on a seasonally adjusted basis in February. Over the past 12-months the index has risen 0.5 percent which is the first positive annual rate of change since July 2007. Regionally, annual prices changes ranged from a 2.4 percent decline in the Pacific division to a 3.6 percent increase in the West South Central division. The index remains 19.4 percent below its April 2007 peak and now roughly the same as the January 2004 index level.

  • 04.13.2012
  • CPI
  • The headline CPI rose at an annualized rate of 3.5 percent in March, and while gasoline prices were a contributing factor (up 23 percent, accounting for a little more than one-third of the overall increase), the report appears consistent with some broad-based price pressure. Energy prices as a whole rose by 11.6 percent in March, as the jump in gas prices was partially offset by a continued decline in the price index for household energy services, which fell 4.9 percent during the month (−1.8 percent on a year-over-year basis). There is some speculation in the media that this offset may provide some relief for consumers, helping to prop up spending that otherwise would have been hamstrung by higher gas prices. Food prices rose 1.9 percent in March, and are up just 1.5 percent over the last 3 months, much lower than its 12-month growth rate of 3.3 percent. On a year-over-year basis the headline CPI is up 2.7 percent, and has been slowing from a recent high of 3.9 percent last September. However, in contrast, the growth rates in underlying inflation have been rising, perhaps to meet in the middle. Excluding food and energy prices, the (“core”) index rose 2.8 percent in March, following a much softer 1.2 percent increase in February. Over the past 3 months, the core CPI is up 2.2 percent, in line with its 12-month growth rate of 2.3 percent (which, if the usual gap holds, puts core PCE inflation very near its explicit target). The longer-run (12-month) growth rate in the core CPI has risen somewhat swiftly: roughly 1.0 percentage point over the past year. Our preferred measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—rose 2.2 percent and 2.7 percent, respectively in March, and are both up 2.4 percent over the past 12 months.
  • 04.12.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods was flat in March, following an annualized increase of 4.4 percent in February. Interestingly, energy prices slipped down 11.0 percent in March, following a 17.3 percent spike up in Februrary. Producer prices for finished consumer foods rose a modest 1.8 percent in March. On a year-over-year basis, the headline PPI is up 2.8 percent, which is above its longer-term (20-year) growth rate of 2.3 percent, but is well off its recent cyclical high of 7.2 percent set last September. Excluding food and energy prices, the “core” PPI rose 3.4 percent in March, after rising 2.0 percent in February. The near-term (3-month) annnualized growth rate in the core PPI edged up from 3.2 percent to 3.6 percent in March, slightly above its 12-month growth rate of 2.9 percent. Further back on the production line, pricing pressure was to the upside, as core intermediate goods prices jumped up 7.0 percent and volatile core crude goods prices rose 14.4 percent in March.
  • 03.30.2012
  • PCE Price Index
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 3.8 percent in February after an increase of 2.7 percent in January. The 3-month annualized growth rate increased from 1.5 percent to 2.5 percent. On a year-over-year basis, the index was up 2.3 percent, less than the 2.4 percent increase in January. The “core” PCE price index—which excludes food and energy prices—was up just 1.6 percent in February, a drop off from the 2.7 percent increase in January. The discrepancy between the “headline” index and the “core” index was caused primarily by an increase in energy prices. Energy prices increased at an annualized rate of 52.1 percent in February. The market based “core” PCE price index—which excludes most imputed prices—increased 1.3 percent in February, after an increase of 2.1 percent in January, and is up 1.9 percent over last year.
  • 03.30.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up from 74.3 to 76.2 in March, which is now a slight increase from February’s index level of 75.3. Sentiment is now at its highest level since February 2011 and slightly higher than its level at the start of last recession (75.5 in December 2007). Both the consumer expectations and current conditions components were revised up in March (from 68.0 to 69.8 for expectations and 84.2 to 86.0 for current conditions). Median short-run (one-year ahead) inflation expectations were adjusted down 0.1 percentage point to 3.9 percent in March, but are still 0.6 percentage points above its level in February. Importantly, longer-term (five-to-ten years ahead) expectations remained at 3.0 percent in March, compared to 2.9 percent in February, which suggests that respondents aren’t expecting a gas price spike in March to feed into an increase in longer-run price pressure.
  • 03.16.2012
  • CPI
  • The headline CPI jumped 5.0 percent in February, but 80 percent of that was gasoline prices. Despite the uptick in February, the 12-month growth rate in the CPI remained at 2.9 percent. Contrasting the jump in gasoline prices, electricity prices were flat and natural gas prices continued to decline—slipping down 9.4 percent during the month (down 1.0 percent over the past year). Food prices—which are up 3.9 percent over the past year—were virtually unchanged in February. Excluding food and energy prices, the (“core”) CPI rose 1.2 percent in February, slightly below its near-term (3-month) growth rate of 1.9 percent, and a full percentage point below its 12-month growth rate of 2.2 percent. Our underlying inflation measures—the median CPI and 16 percent trimmed-mean CPI—gave a similar signal. The median CPI rose 1.7 percent during the month, while the 16 percent trimmed-mean CPI edged up just 1.3 percent. February’s reading for both measures fell short of their respective near-term growth rates of 2.4 percent for the median and 2.0 percent for the trim. After factoring in February’s data, the 12-month growth rate in the median CPI edged down from 2.4 percent to 2.3 percent, and the growth rate in the trim slipped down by 0.2 percentage points to 2.4 percent. Interestingly, prices of 21 out of the 45 components that we use to calculate the median CPI declined in February. After expenditure weighting, that represents roughly 30 percent of the overall marketbasket. Also, just 24 percent of the overall index rose at rates exceeding 3.0 percent in February, compared to 50 percent last month and roughly 40 percent over the past six months.
  • 03.16.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment fell off a bit in March, slipping from an index level of 75.3 to 74.3. The slight overall decline came as a 2.3 point decrease in consumer expectations (from 70.3 to 68.0) was only partially offset by an 1.2 point increase in respondents collective judgment on current conditions. Median short-run (one-year ahead) inflation expectations jumped up from 3.3 percent to 4.0 percent, as gas prices spiked last month. Importantly, longer-term (five-to-ten years ahead) expectations on edged up from 2.9 percent to 3.0 percent, suggesting that respondents aren’t expecting a gas price spike to feed into an increase in longer-run price pressure.
  • 03.15.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods jumped up at an annualized rate of 4.4 percent in February, contrasting recent soft readings that include a modest 1.2 percent increase in January and a 1.2 decline in December. Energy prices (mostly gasoline) jumped up 17.3 percent, accounting for much of the overall increase. On the other hand, producer prices for finished consumer foods declined 1.2 percent during the month, its third straight decline. On a year-over-year basis, the headline PPI is up 3.3 percent, which is above its longer-term (20-year) growth rate of 2.3 percent, but is well off its recent cyclical high of 7.2 percent set last September. Excluding food and energy prices, the “core” PPI rose 2.0 percent in February, after a 6.2 percent spike in January. Interestingly, the a third of February’s modest increase can be tied to a single component: pharmaceutical preparations. The near-term (3-month) annnualized growth rate in the core PPI edged up from 2.7 percent to 3.6 percent in February, slightly above its 12-month growth rate of 3.0 percent. Further back on the production line, pricing pressure was mixed, as core intermediate goods prices jumped up 13.3 percent in February—well above its 2.5 percent year-over-year growth rate, and core crude goods prices slipped down 3.1 percent—in line with its 12-month growth rate of −2.5 percent.
  • 03.01.2012
  • PCE Prices
  • The Personal Consumption Expenditures (PCE) price index increased at an annualized rate of 2.2 percent in January, after a 0.8 percent increase in December. This pulled the near term (3-month) annualized growth rate up from 0.7 percent to 1.3 percent. On a year-over-year basis, PCE was down from 2.5 percent in December to 2.3 percent in January. “Core” PCE—which excludes food and energy prices—was up 2.2 percent in January as well, indicating that there was not much upward pressure on the index from food and energy prices in January. Core PCE is up 1.9 percent from last year. The market-based core PCE (which excludes most imputed prices) was up 2.0 percent in January after a 1.9 percent increase in December, and the 12-month growth rate stayed at 1.9 percent.
  • 02.28.2012
  • Housing Price Indexes
  • The S&P Case-Shiller national housing price composite fell to an index level of 125.6, representing a 3.8 percent decline during the fourth quarter of 2011 and 4.0 percent decline from the fourth quarter of 2010. Both the 10- and 20-city composites were down 1.1 percent in December and fell 3.9 percent and 4.0 percent, respectively from December 2010. All three composites ended at record lows in 2011 since the peak in 2006. The national index is at the lowest level since the third quarter of 2002, while the 10- and 20-city indexes are back to mid-2003 index levels.

    The Federal Housing Finance Agency (FHFA) purchase only housing price index fell 0.1 percent during the fourth quarter of 2011 and 2.4 percent from the fourth quarter of 2010. On monthly basis, home prices rose 0.7 percent from November to December to an indexed value of 184.2—the highest level since February 2011. Compared to December 2010, this represents a 0.8 percent decline. Across the nation, year-over-year price changes ranged from a 3.8 percent decline in the Pacific region to a 3.0 percent increase in the East South Central region.

  • 02.24.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment revised sharply higher in late February, rising by 2.8 index points during the revision, and changing a modest decrease relative to January’s level into a slight uptick (from 75.0 in January to 75.3 in February). Most of the upward revision in February was due to an adjustment in the expectations component, which was revised up from 68.0 to 70.3 during the month, breaking through the 70.0 threshold for the first time in a year. The current conditions component was revised up slightly to 84.2, modestly above its January level of 79.6. Median short-run (one-year ahead) inflation expectations were revised up from 3.2 percent to 3.3 percent, and are now unchanged from a month ago. Also, longer-term (five-to-ten years ahead) expectations were unrevised at 2.9 percent, up from 2.7 percent in January.
  • 02.17.2012
  • CPI
  • The headline CPI rose at an annualized rate of 2.5 percent in January, slightly below its 12-month growth rate of 2.9 percent. Food and energy price increases were modest in January, and the bulk of the increase came from the “core” (excluding food and energy) index. The core CPI rose 2.7 percent in January, compared to its near-term (3-month) growth rate of 2.2 percent and its 12-month growth rate of 2.3 percent. Across broad components, price pressure was mostly to the upside in January. Apparel prices jumped up 11.2 percent during the month, seeming to resume its elevated trend from the middle of last year after a brief respite over the last four months of 2011. On a year-over-year basis the series is up 4.7 percent. Medical care commodities (up 7.4 percent), recreation prices (up 7.5 percent), motor vehicle fees (up 18.1 percent), and tobacco prices (up 5.8 percent), were also elevated in January.

    On the other side of the price change distribution, used cars and trucks prices slipped 11.3 percent, marking an acceleration in its recent downward trend. On a year-over-year basis, the series is up just 3.2 percent, down sharply from current cyclical high of near 17 percent in mid-2010. A more general look at the price change distribution reveals that roughly 50 percent of the index rose at rates exceeding 3.0 percent, compared to roughly 30 percent over the previous 3 months.

    On the other end of the distribution, just 22 percent of the index fell into the bins below 1 percent, compared to an average of 33 percent over the previous 3 months. The median CPI rose 3.0 percent and the 16 percent trimmed-mean CPI increased 2.9 percent during the month. Notably, the revised seasonal factors led to an upward revision to the near-term growth rate in the median CPI—from 2.1 percent to 2.4 percent through December. After adding in January’s increase, the 3-month growth rate in the median rose to 2.6 percent, slightly above its 12-month growth rate of 2.4 percent (which is its highest growth rate since April 2009). The near-term trend in the trim is a little lower (2.0 percent), but on a year-over-year basis, its up 2.6 percent. Echoing the upward pressure signaled by the median CPI, the sticky CPI—which tracks the price changes in the more persistent components of the marketbasket—rose 3.0 percent in January, outpacing its 3-month growth rate (2.7 percent) and its year-over-year growth rate of 2.2 percent.

  • 02.16.2012
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods rose at an annualized rate of 1.2 percent in January, reversing a 1.2 percent decrease in December. The headline increase came as decreasing food and energy prices were offset by increases elsewhere in the index. In January, energy prices slipped down 6.0 percent (their fourth straight monthly decline) and food prices slipped down 3.6 percent. On a year-over-year basis, the headline PPI is up 4.1 percent, which is above its longer-term (20-year) growth rate of 2.3 percent, but is well off its recent cyclical high of 7.2 percent set last September. Excluding food and energy prices, the “core” PPI jumped up 5.5 percent in January, following a 3.4 percent increase in December. These back-to-back increases pushed up the series’ near-term (3-month) growth rate from 0.9 percent to 3.2 percent during the month, in line with its 12-month growth rate of 3.0 percent. Further back on the production line, pricing pressure was relatively subdued, as core intermediate goods prices fell for the fourth consecutive month (down 0.6 percent in January); and the volatile core crude goods series rose 7.5 percent. On a year-over-year basis, core intermediate goods are up 2.7 percent. And core crude goods prices are virtually unchanged from last January.
  • 02.14.2012
  • Import and Export Prices
  • In January, U.S. import prices increased by 0.3 percent after falling 0.1 percent in December. January marks only the third increase in import prices since June of 2011. The main driver behind January’s increase was a 1.2 percent jump in petroleum prices which had previously been trending downward, decreasing in four of the past five months. On a year-over-year basis, import prices were up only 7.1 percent after posting double-digit gains from March until November of last year. Nonpetroleum import prices remained unchanged in January after ticking up 0.1 percent in December. On a year-over-year basis, nonpetroleum import prices were up 2.5 percent, a deceleration from December’s 3.4 percent. Downward trends in both import prices and petroleum prices, accompanied by modest changes in nonpetroleum prices, indicate a low potential for foreign prices to cause an increase in domestic price levels in the coming months.

    Export prices rose by 0.2 percent after declining 0.5 percent in December. Increases in agricultural prices of 2.5 percent (—2.5 percent, previously) were a main driver behind the drop. Nonagricultural prices were unchanged after decreasing throughout the fourth quarter. Year-over-year, exports posted gains of 2.5 percent, the smallest yearly increase since November 2009.

  • 02.10.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment slipped a little in February, falling 2.5 points to an index level of 72.5, partially reversing a substantial (5.1 point) gain in January. Most of the headline softening in February was due to a 4.6 point decline in the current component index, completely offsetting its January jump. Consumer expectations edged down 1.1 points to an index level of 68.0 in February, its first decrease in six months. Median short-run (one-year ahead) inflation expectations edged down from 3.3 percent to 3.2 percent in February. Interestingly, longer-term (five-to-ten years ahead) expectations increased 0.2 percentage points to 2.9 percent following 4 consecutive months at 2.7 percent.
  • 01.30.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up by 1.0 index point to 75, a substantial increase from December’s level of 69.9. Over the past few months, consumer sentiment has shown a marked improvement, rising nearly 20 points from a recent low of 55.8 last August. Both the current conditions and consumer expectations components have contributed to the overall increase. In January, the current conditions component was revised up from 82.6 to 84.2, likely reflecting some reported positive momentum in the labor market. The expectations component, which has risen a little over 20 points since last August, was revised up from 68.4 to 69.1 in January, jumping up from a level of 63.6 in December. Median short-run (one-year ahead) inflation expectations ticked up from 3.1 percent to 3.3 percent in January, likely reflecting a modest increase in gas prices. On the other hand, and perhaps more importantly, longer-term (five-to-ten years ahead) expectations remained at 2.7 percent for the fourth consecutive month, which is somewhat remarkable. The last time longer-run expectations remained unchanged for 4 months was in mid-2003, incidentally also at 2.7 percent.
  • 01.30.2012
  • Personal Consumption Expenditure
  • The Personal Consumption Expenditure (PCE) ticked up at an annualized rate of 0.8 percent in December, following two consecutive (energy price induced) declines. On a year-over-year basis, PCE inflation has started to decelerate in recent months—down from a recent high of 2.9 percent in September to 2.4 percent as of December. Excluding food and energy prices, the “core” PCE price index rose 1.9 percent in December, following upwardly revised, but still soft, readings in October and November. Still, on the fourth quarter as a whole, the core PCE rose just 1.1 percent, a significant slowdown from its year-over-year growth rate of 1.8 percent. The market-based core PCE—a subgroup of the core index that only excludes most imputed prices—rose 2.1 percent in December, following a 1.5 percent increase in November. The 12-month growth rate in the market-based core index edged up 0.1 percentage point to 1.9 percent in December.
  • 01.19.2012
  • CPI
  • slight 0.6 percent increase in November. On a year-over-year basis, the headline CPI continued to drift down toward underlying inflation measures, edging down from 3.3 percent to 3.0 percent during the month. Excluding food and energy components, the price index rose 1.8 percent, in line with its 3-month annualized growth rate, and down slightly from its 12-month growth rate of 2.2 percent. Our measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—disagreed markedly in December. The median CPI rose 2.9 percent, while the trim was up just 1.5 percent. Interestingly, the spike up in the median during December exceeded its longer-run (12-month) growth rate of 2.2 percent, while the increase in the 16 percent trimmed-mean CPI is in line with its more subdued trend, which is down from its 12-month growth rate of 2.5 percent.

    It appears that there are a few relative price changes that are causing the disparity. Rents are starting to accelerate. Rent of primary residence rose 3.1 percent in December, and has risen 3.5 percent over the past six months. Owners’ equivalent rent (OER) rose 2.2 percent in December and is up 2.3 percent over the past six months. Interestingly, all but one of the regional OER components we use to compute the median CPI posted an increase near 3.0 percent in December (the median component was OER: Midwest, which rose 2.9 percent). On the other hand, price increases in autos and apparel from earlier in the year continued to unwind in December, with apparel prices falling 1.4 percent and auto prices decreasing 5.0 percent. So while rents were pushing up on the median, decreasing apparel and auto prices were holding down the trim. Given that the weight of OER trumps that of apparel and autos, it likely means that underlying inflation was closer to the 16 percent trimmed-mean this month than the median. This would, in turn, suggest that inflation is continuing on its more subdued path than we saw in mid-2011.

  • 01.13.2012
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment jumped up to an index level of 74.0 in early January, its first foray above 70 since June 2011. Sentiment has increased 18.3 points over of the past five months. Both the current conditions and consumer expectations components contributed to the overall increase. The current conditions component rose 3.0 points to 82.6 in January, and has risen roughly 14 points in the past five months. The expectations component, which rose by 21 points and is responsible for the bulk of the overall increase since August, increased from 63.6 in December to 68.4 in January. Median inflation expectations for both the shorter-run (one-year ahead) and longer-term (five-to-ten years ahead) ticked up for the first time since August. Shorter-run expectations rose 0.1 percentage point to 3.2 percent, while longer-term expectations edged up from 2.7 percent to 2.8 percent (but remain 0.1 percentage point below their average over the past 10 years).
  • 12.23.2011
  • PCE Price Index
  • The Personal Consumption Expenditure (PCE) price index was virtually unchanged in November, edging down at an annualized rate of 0.5 percent. On a year-over-year basis, PCE inflation has started to decelerate—largely on decreasing energy prices—and stands at 2.5 percent as of November (down 0.4 percentage points from its recent high of 2.9 percent in September). Excluding food and energy prices, the “core” PCE price index rose 1.0 percent in November, following a 0.8 percent increase in October. Upward pressure on the core PCE price index seen over the middle-months of the year appears to have dissipated, as the near-term (3 month) growth rate in the series has fallen from a recent cyclical high of 2.5 percent in July down to just 0.6 percent as of November. Over the past year, the index is up 1.7 percent. The market-based core PCE—a subgroup of the core index that only excludes most imputed prices—increased 1.6 percent in November, after an upwardly revised (but still subdued) 0.6 percent increase in October. The 12-month growth rate in the market-based core index remained at 1.7 percent in November.
  • 12.22.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up in late December by a little over 2 index points to a level of 69.9—its highest since June—and has now well above its recent low of 55.7 reached in August. The overall increase was driven in large part by the expectations component, which was revised up from 61.1 to 63.6 in December, compared to a level of just 55.4 in November. The release noted that respondents judged that prospects for the national economy had improved during the month, though the data was collected before the debate over the payroll tax cut extension grid locked. The current conditions component was also revised up during the month, from 77.9 to 79.6, compared to a level of 77.6 in November. Median inflation expectations for both the shorter-run (one-year ahead) and longer-term (five-to-ten years ahead) were unrevised in late December, at 3.1 percent and 2.7 percent, respectively.
  • 12.16.2011
  • CPI
  • The headline CPI was virtually flat (edging down just 0.2 percent at an annualized rate) in November. Excluding food and energy components, the price index rose 2.1 percent in November, compared to a 1.6 percent increase in October. Over the past year, the core CPI has risen 2.2 percent, though it has decelerated lately, as its near-term (3-month) growth rate stands at just 1.5 percent through November. Interestingly, measures of underlying inflation produced by the Federal Reserve Bank of Cleveland—the median CPI and 16 percent trimmed-mean CPI—came in roughly 1 percentage point lower than the core CPI in November. The median rose 1.1 percent, while the trim was up 1.0 percent. The discrepancy between the core and trimmed-mean measures appears to stem from apparel prices (particularly men’s and boy’s apparel, which jumped up 15 percent in November) putting upward pressure on the core CPI. Traditionally, apparel prices have been a relatively noisy influence on the price change indicators and recently the volatility in this series has grown markedly, so there is little reason to think upward pressure from this component is providing any meaningful signal of future inflation. For example, the variance in men’s and boy’s apparel has more than doubled in the wake of the recession, compared its average over the previous five years. If the idea of a “core” inflation measure is to amplify the signal-to-noise ratio than inclusion of this component isn’t helping.

    Aside for the jump in apparel prices, there were a couple of other notable core component price increases to mention. Rent of primary residence and owners’ equivalent rent (OER) continued on their recent upward trek, rising 2.6 percent and 1.8 percent, respectively in November. Over the past 3 months, rent is up 3.4 percent and OER has increased 1.9 percent, both exceeding their respective 12-month growth rates of 2.4 percent and 1.7 percent. Also, medical care services prices followed up a 6.6 percent spike up in October by jumping up 6.0 percent in November, pushing its 3-month growth rate to its highest level (5.0 percent) since the onset of the recession. Despite a few notable increases, the price change distribution continued to point toward a weaker trajectory than the second and (most of) the third quarter. Over the last 3 months, nearly 40 percent of the overall index posted price gains of less than 1 percent or decreased outright, compared to just 25 percent over the previous three month span. Also, just 30 percent of the index rose at rates greater than 3 percent, compared to nearly half of the index from June to August.

  • 12.15.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods rebounded from an annualized decrease of 3.7 percent in October, rising 3.2 percent in November. The rebound was due in large part to a 12.9 percent spike up in finished consumer foods. Energy prices were relatively flat in November, rising a muted 1.2 percent, compared to their year-over-year growth rate of 12.2 percent. The 12-month growth rate in the overall PPI continued to edge away from its recent high of 7.1 percent in July, and, as of November, stands at 5.9 percent (which is still elevated relative to its 20-year trend growth rate of 2.3 percent). Excluding food and energy prices, the “core” PPI rose 1.3 percent in November, following a flat reading in October. Over the past three months, the annualized growth rate in the core PPI is just 1.3 percent, compared to its longer-term (12-month) growth rate of 2.9 percent. Further back on the production line, pricing pressure continued to ebb, as core intermediate goods prices fell 4.9 percent and core crude goods—which are up 11.8 percent over the past year—followed up October’s 40.8 percent plunge by diving down 26.3 percent in November.
  • 12.09.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment improved in December, rising 3.6 points to an index level of 67.7. It now sits 12 points above its recent low of 55.7, which it hit in August. The overall increase was driven in large part by the expectations component, which jumped up from 55.4 in November to 61.1 in December. The current conditions component edged up 0.3 points to 77.9 during the month. Headline sentiment and its components have steadily improved from their respective lows in August, but still remain well below levels attained early in 2011. The release did note one significant downside aspect to the month’s report: Only 8 percent of consumers expect an inflation-adjusted (real) income gain in 2012, matching the all-time low set in March 1980 (an important difference being that inflation and inflation expectations were running above 10 percent at the time).This dour assessment of income growth meshes with data on wages and compensation, which have been flat-to-down in recent quarters. Shorter-run (one-year ahead) median inflation expectations ticked down 0.1 percentage point to 3.1 percent during the month, while longer-term (five-to-ten years ahead) expectations remained unchanged at 2.7 percent (at the lower end of their “normal” range).
  • 11.23.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment held onto its gains in early November and was essentially unrevised for the month (at an index level of 64.1) increasing 3.2 points over October’s level. While the current level of sentiment is well off the historical average for the series, it has improved almost 10 points over the past four months. Both the expectations and current conditions components of the overall index improved in November. The current conditions component rose from 75.1 to 77.6 during the month, while expectations rose by 3.6 points to 55.4. Both shorter-run (one-year ahead) and longer-term (five-to-ten years ahead) median inflation expectations remained unchanged in November, at 3.2 percent and 2.6 percent, respectively.
  • 11.22.2011
  • PCE Prices
  • The Personal Consumption Expenditure (PCE) price index slipped down at an annualized rate of 0.6 percent in October, following an upwardly revised 2.1 percent increase in September. The tick down in October helped to bring the series’ 12-month growth rate down a couple of tenths to 2.7 percent. Excluding food and energy prices, the “core” PCE price index rose 0.9 percent during the month, after a virtually flat reading in September. The core PCE is trending at a much slower growth rate than the headline index—rising 1.7 percent over the past year. The market-based core PCE—a subgroup of the core index that only excludes most imputed prices—increased a mere 0.2 percent in October, and is trending at a growth rate of 1.7 percent over the past year.
  • 11.16.2011
  • CPI
  • The headline CPI fell at an annualized rate of −1.0 percent in October, as a dip in energy prices (led by a 31.6 percent decrease in motor fuel) more than offset a modest 1.4 percent increase in food prices. October’s increase in food prices was the smallest of the year (so far) and was due in large part to a fairly sizeable 28 percent decrease in fresh fruits and vegetables prices. Most of the other food categories were in the upper tail of the price change distribution. Given the decrease in the headline CPI in October, we are finally starting to see some slowing in its year-over-year rate—which ticked down from 3.9 percent to 3.5 percent. Excluding food and energy prices, the “core” CPI rose 1.6 percent in October, following a 0.7 percent increase in September. Over the past three months, the series has risen at an annualized rate of 1.8 percent, slightly below its 6-month growth rate of 2.4 percent and its 12-month growth rate of 2.1 percent. The median CPI rose 2.3 percent and the 16 percent trimmed-mean measure rose 1.4 percent in October. As was the case last month, both measures came in below their respective 3- and 6-month growth rates. Over the past year, the median CPI is up 2.2 percent, while the trim is up 2.5 percent. There was modest disagreement between the median and trim in October (2.3 percent versus 1.4 percent) and that appears to be the result of the trimmed-mean picking up onthe downside skew in this month’s price change distribution (a large part of that was the decreases in the energy and autos components). Interestingly, the 16 percent trimmed-mean has been a little more variable than the median over the past five months or so.
  • 11.15.2011
  • Producer Price Index
  • There was scant evidence of pricing pressure coming from October’s Producer Price Index (PPI) report. The PPI for finished goods fell at an annualized rate of 3.7 percent in October, partially reversing a 9.8 percent spike up in September. The headline decrease was due in part to a 15.3 percent decline in the finished energy goods component during October, which had jumped up 31.3 percent in the previous month. Food prices were nearly flat in October, rising just 0.6 percent compared to increases of 7.0 percent and 13.8 percent in September and August, respectively. The 12-month growth rate in the PPI rose slipped down from 6.9 percent in September to 5.9 percent, though is still elevated relative to its 20-year trend growth rate of 2.3 percent. Excluding food and energy prices, the (“core”) PPI was flat in October, following a 2.7 percent gain in September. Over the past three months, the annualized growth rate in the core PPI is just 1.1 percent, compared to its longer-term (12 month) growth rate of 2.8 percent. Further back on the production line, pricing pressure ebbed, as core intermediate goods prices fell 6.6 percent and core crude goods—which are up 11.8 percent over the past year—plummeted 40.8 percent in October.
  • 11.14.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment increased 3.3 points in early November to 64.2, which marks the highest index level since June of this year. A 4.4 point jump in the consumer expectations component to an index level of 56.2 (previously 51.8) paired with a more modest 1.5 increase in the current economic conditions component to an index level of 76.6 (previously 75.1) indicates a slight improvement in the outlook towards the national economy with consumers less likely to expect the economy to worsen in the year ahead. Confidence in economic policies, however, reached a new low of 58 percent of all consumers rating economic policies unfavorable. Shorter-term median inflation expectations (one-year ahead) remained unchanged in November at 3.2 percent and longer-term inflation expectations (five-years ahead) fell 0.1 percent to 2.6 percent.
  • 10.31.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment increased 3.4 points in late October to an index level of 60.9 (57.5 previously). Although October marks a 5.2 point gain from a low in August, the index still remains at levels reminiscent of early 2009. Contributing to the gain was an uptick in current economic conditions to 75.1, up 1.3 points from 73.8 earlier in the month, as well as an increase in consumer expectations which jumped 4.8 points to 51.8 from 47.0. Even though consumers indicated marginal gains in favorable economic prospects, 71 percent of all consumers still expected bad times financially in the economy in the year ahead. Both shorter-term median inflation expectations (one-year ahead) and longer-term inflation expectations (five-years ahead) remained unchanged at 3.2 percent and 2.9 percent, respectively.
  • 10.28.2011
  • Personal Consumption Expenditure
  • The Personal Consumption Expenditure (PCE) price index rose 2.0 percent in September, following an upwardly revised 3.2 percent gain in August. Food prices continued to elevate, climbing 6.5 percent in September, and volatile energy prices rose 28.2 percent, contributing to the overall increase. Over the past 12 months, the PCE price index is up 3.0 percent. Excluding food and energy prices, the “core” PCE price index was flat in September, falling from the 2.0 percent pace in August. On a year-over-year basis the index remained at 1.7 percent. The core CPI also saw a significant drop in its monthly growth rate in September. The market-based core PCE—a subgroup of the core index that only excludes most imputed prices—rose just 0.4 percent in September. The market-based core measure is up 1.6 percent over the past year.
  • 10.19.2011
  • CPI
  • The headline CPI rose at an annualized rate of 3.7 percent in September, down slightly from its near-term (3-month) growth rate of 4.8 percent. On a year-over-year basis, however, the series ticked up from 3.8 percent to 3.9 percent in September. Rising energy and food prices were the primary contributors to the overall increase in September. Much of the increase in energy prices (up 27 percent) was due to the seasonal factor for gasoline. Prices at the pump did fall in September (at an annualized rate of 8.3 percent), though after seasonal adjustment, the series jumped up 41.5 percent, pushing up energy prices (and the overall index). The food price index rose 5.5 percent during the month, somewhat less than August’s increase of 6.4 percent, and is now up 4.7 percent over the past year. The release did note that none of the major grocery store food group indexes declined in September, and our data show that all but one “food at home” category (meat, poultry, fish, and eggs) ended up in the upper tail of the price change distribution (increases greater than 5 percent) this month.

    Excluding food and energy prices, the “core&rdqo; CPI rose just 0.7 percent in September, following four straight increases above 2.5 percent. This marked slowdown came as a number of recent trends reversed course during the month. Notably, apparel prices—which were trending at an annualized growth rate of 16.2 percent over the prior 3 months—plummeted 12.7 percent in September. Also, used cars and trucks prices slipped down 6.5 percent in September, following double-digit price gains in four of the previous five months. New vehicle prices were roughly flat for the third consecutive month. After putting some upward pressure on the core CPI over the past two months, the index for OER (owners’ equivalent rent) rose 1.5 percent, equaling its 12-month percent change. The median and 16 percent trimmed-mean CPI measures rose 2.3 percent and 2.5 percent, respectively, in September; edging away from their near-term (3-month) growth rates of roughly 3.0 percent. Over the past year, the median CPI rose 2.1 percent, while the trim is up 2.5 percent.

  • 10.14.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer sentiment ticked down in October, falling 1.9 points to an index level of 57.5 after rising to 59.4 in September. In the past three months, the average level of the index has reached the lowest level since 1980. Contributing the decline was an all-time record number of consumers citing income declines and a record setting proportion of consumers expecting no increase in their incomes during the year ahead. The expectations component of the index fell by 2.4 points to 47.0, erasing September’s 2.0 point gain and falling below its June 2008 level. The current conditions component fell as well to 73.8 after rising to 74.9 in September. 71 percent of consumers reported that economic conditions had worsened and 80 percent expected the economy to stay the same or worsen in the year to come. Shorter-term median inflation expectations (one-year ahead) edged down to 0.1 percentage points to 3.2 percent in October. Longer term inflation expectations (five-years ahead) decreased as well by 0.2 percentage points to 2.7 percent.
  • 09.30.2011
  • PCE
  • The Personal Consumption Expenditure (PCE) price index rose 3.0 percent in August, following a 4.5 percent spike in July. Food prices jumped up 7.5 percent in August, and volatile energy prices rose 15.4 percent, contributing to the overall increase. Over the past 12 months, the PCE price index is up 2.9 percent. Excluding food and energy prices, the “core” PCE price index rose 1.8 percent in August, a slight deceleration from a 2.4 percent increase in July. On a year-over-year basis the index is up 1.6 percent. August&rsqu;s slight deceleration the the core PCE price index contrasts the upward move in the core CPI, which rose 3.0 percent during the month after rising 2.7 percent in July. Part of the disagreement between the two measures can be tied to nonmarket-based imputed prices, as the market-based core PCE rose 2.4 percent in August, following a 2.2 percent gain in July (it is also not unusual to see some disagreement between the two measures in an environment of rising rents, which receive a much higher weight in the CPI). Still, the market-based core measure is up just 1.6 percent over the past year.
  • 09.30.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment edged up in September, rising an index level of 59.4 from 55.7 in August. Still, the level of sentiment has fallen nearly 15 points over the past four months. Most of the recent decrease has come from the expectations component which, while it increased 2.0 points to 49.4 in August, has fallen 20 points in four months, and is sitting just 0.2 points above its June 2008 level. The current conditions component improved from 68.7 in July to 74.9 in August. Shorter-term median inflation expectations (one-year ahead) continued to drift lower, decreasing 0.1 percentage points to 3.3 percent in August, and are now down 1.3 percentage points from April’s recent high. Longer-term inflation expectations (five-years ahead) remained flat at 2.9 percent.
  • 09.15.2011
  • Consumer Price Index
  • The headline CPI rose at an annualized rate of 4.6 percent in August and is now up 3.8 percent over the past year. Food prices rose 6.1 percent and energy prices increased 15 percent during the month, but these components were not the only major contributors to the overall increase. Apparel prices proceeded on their northward trajectory in August, rising 14.2 percent, in line with their three-month annualized percent change of 16.2 percent. The 12-month percent change in apparel prices has risen from −0.6 percent in March to 4.2 percent in August.

    Owner’s equivalent rent (OER) and rent of primary residence have also picked up recently, rising 2.6 percent and 4.6 percent, respectively, during the month. While on a year-over-year basis, OER is up just 1.4 percent, its three-month annualized percent change has jumped up from 0.9 percent in May to 2.5 percent currently (slightly above its 10-year growth rate of 2.3 percent). August also saw continued upward pressure on underlying inflation measures. The CPI excluding food and energy rose 3.0 percent in August, a similar increase to what we’ve seen in this measure over the past six months (up 2.7 percent).

    On a year-over-year basis, the core CPI is now up 2.0 percent. Our measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—were even a notch higher in August, rising 3.6 percent and 4.0 percent, respectively. The median CPI is now up 2.0 percent over the past year, while the trimmed mean has risen 2.4 percent. Perhaps even more worrisome is that in August roughly 65 percent of the overall index (by expenditure weight) rose at rates exceeding 3.0 percent, compared to 43 percent in July and an average of 32 percent over the prior 12 months. The last time this much mass was above 3.0 percent was in July 2008 at the height of the oil price shock. Also, just 13 percent of the index was in the other tail of the distribution (a price change of less than 1 percent). Unlike in previous months, where there was a fair amount of disagreement between the trimmed-mean measures and the sticky price CPI, this month the sticky price CPI rose 2.9 percent.

  • 08.29.2011
  • PCE
  • The Personal Consumption Expenditure (PCE) price index jumped up 4.5 percent in July, after a 1.5 percent decrease in June. Rising gasoline prices accounted for a large part of the overall increase. Over the past 12 months, PCE prices are up 2.8 percent. Excluding volatile food and energy price increases, the “core” PCE price index rose 2.4 percent in July, in line with its growth rate over the prior three months, though slightly above its 12-month percent change of 1.6 percent. The market-based core PCE—a subgroup of the core index that only excludes most imputed prices—rose 2.3 percent in July, consistent with the increase in the overall core PCE. The market-based core measure is up 1.5 percent over the past year, though is trending at a somewhat elevated 2.7 percent growth rate over the past 3 months.
  • 08.26.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up slightly in late August, from 54.9 to 55.7, but that is still an 8 point drop from July’s level. Sentiment, which has fallen nearly 20 points from a cyclical high of 77.5 in February, sits a mere 0.4 points above its low during the depths of the recent financial crisis (55.3 in November 2008). While consumers’ judgment over the current conditions has weakened considerably as of late, the majority of the the downward plunge in the overall sentiment index has come from the consumer expectations component—which has fallen 22.1 points over the past three months. Consumer expectations, at a level of 47.4, are at a 31-year low. Shorter-term median inflation expectations (one-year ahead) were revised up from 3.4 percent to 3.5 percent in late August, 0.1 percentage points above July’s reading. However, longer-term inflation expectations (five-years ahead) remained flat at 2.9 percent.
  • 08.18.2011
  • CPI
  • The headline CPI jumped up at an annualized rate of 6.2 percent in July, surprising expectations to the upside. Increases in food at home (up 7.2 percent) and a rebound in motor fuel prices (up 72 percent after falling 56 percent in June) accounted for a little over half of the overall gain. Though on a not seasonally-adjusted basis, motor fuel fell 16.5 percent. Excluding food and energy prices, the core CPI rose 2.7 percent in July. Over the past three months, the core CPI is trending at an annualized growth rate of 3.1 percent, above its 12-month growth rate of 1.8 percent. The headline CPI is still running at an elevated 3.6 percent over the past year. The median CPI rose 2.9 percent in July, while the 16% trimmed-mean CPI jumped up 3.3 percent. The two measures are ranging between 2.2 percent and 2.4 percent over the past three months. Over the past year, the trim is up 2.1 percent and the median CPI is up 1.8 percent. A slightly more subdued signal of underlying inflation is coming from the sticky CPI, which increased 2.1 percent in July, but is up only 1.5 percent over the past year. Excluding shelter, the index rose just 1.4 percent during the month, matching its 3-month growth rate.
  • 08.12.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment plummeted in August, falling 8.8 points (or 13.8 percent) to a level of 54.9, and is now slightly lower than its level of 55.3 during the depths of the recent financial crisis (November 2008). The last time sentiment was this low was during the 1980 recession. Consumer pessimism has grown over the past four months, as the sentiment index has fallen nearly 20 points since May. While consumers’ judgment over the current conditions has weakened considerably as of late, the majority of the the downward plunge in the overall sentiment index has come from the consumer expectations component—which fell 10.3 points in August to a level of 45.7 (within a few tenths from its all-time low). As for a possible driver of such pessimism, the release noted: “More importantly, consumers have shifted from being optimistic about the potential impact of monetary and fiscal policies to a sense of despair and pessimism about the role of the government. Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government’s role, and never before have consumers rated economic policies so unfavorably.” While consumers’ sentiment weakened in August, inflation expectations remained unchanged. Shorter-term inflation expectations (1 year ahead) were flat at 3.4 percent and longer-term inflation expectations (5 years ahead) remained at 2.9 percent.
  • 08.02.2011
  • PCE
  • The Personal Consumption Expenditure (PCE) price index slipped down 2.0 percent in June, brought down in large part by decreasing energy prices (which fell at an annualized rate of 42.5 percent). Over the past 12 months, PCE prices have risen 2.6 percent. Underlying inflation—as measured by the core PCE—decelerated in June, rising 1.4 percent compared to 3.0 percent jump up in May. Over the past year, core PCE prices are up just 1.3 percent, though have risen at an annualized rate of 2.1 percent. Interestingly, the market-based core PCE—a subgroup of the core index that only includes observable price measures—followed a 3.2 percent jump up in May by rising 2.6 percent in June, pushing its 6-month annualized growth rate up to 2.3 percent.
  • 07.15.2011
  • CPI
  • The headline CPI decreased at an annualized rate of 2.6 percent in June, though is still up 3.6 percent over the past year. June’s decrease was due in large part to a sizeable decline in gasoline prices (down 57 percent at an annualized rate). Household energy prices decreased as well during the month, falling 13.3 percent. Food prices rose 2.4 percent in June, the series’ smallest monthly increase so far this year. Excluding food and energy prices, the (“core”) CPI rose 3.1 percent in June (higher than expected), following a 3.5 percent increase in May. Over the past 3 months, the index has risen 2.9 percent, compared to its longer-term (12-month) growth rate of 1.6 percent. The largest component of the core index—owners’ equivalent rent—rose 1.9 percent in June, a modest acceleration over its increase of 1.2 percent in May (though that doesn't appear to be the “culprit” for the uptick in the core). Price increases in lodging away from home, new and used autos, and apparel accounted for much of the increase. The index for lodging away from home followed up its 40 percent spike up in May (its largest price increase since October 2005) by increasing 42.6 percent in June. Car and truck rental, a particularly noisy series, rose 51 percent in June, more than rebounding from a 42 percent decrease in May. New vehicle prices, which jumped up 14 percent in May, rose 7.5 percent in June and have risen 8.3 percent over the past six months, compared to a growth rate of -0.5 percent over the six months prior to that. Also, used car prices jumped up 22 percent during the month, the series’ largest monthly increase since December 2009. Apparel prices jumped up 18.3 percent in June (its largest monthly increase since mid-1990), in part as the seasonally-adjusted index for men’s apparel posted its largest one month jump up in the history of the series (which dates back to 1947), rising 35.4 percent. Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland were much more subdued than the core CPI in June, as the median CPI rose 1.7 percent and the 16 percent trimmed-mean CPI increased just 1.2 percent. Over the past 3 months, the median and trim are up 2.2 percent and 2.4 percent, respectively, at least 0.5 percentage points below the near-term growth rate in the core CPI.
  • 07.15.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment fell precipitously in July, dropping 7.7 points to 63.8, its lowest level since March 2009. The overall decrease came as the consumer expectations component plummeted from 64.8 June to 55.8 in July. The current conditions component also slipped during the month—from 82 to 76.3. Meshing with the current dour news on employment, the release noted: “Consumers reported much less favorable news about jobs. Twice as many consumers reported hearing about new job losses compared with job gains in early July. Just two months ago, more consumers reported hearing news about job gains than job losses.” Median year-ahead inflation expectations continued to abate, decreasing 0.4 percentage points to 3.4 percent and are now down 1.2 percentage points from a recent high in April. Longer-term (5- to 10-year) median inflation expectations ticked down from 3.0 percent in June to 2.8 percent in July.
  • 07.01.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised down slightly in late June—from an index value of 71.8 to 71.5. While the headline estimate was little changed during the revision, the underlying components shifted markedly. The current conditions component was revised up from 79.6 to 82.0 in June, reportedly on easing gasoline prices, and is now 0.1 index point above May’s level. On the other hand, the expectations component was revised down sharply, from 66.8 to 64.8. Median year-ahead inflation expectations edged were revised down from 4.0 percent to 3.8 percent in late June, continuing to recede from a recent high of 4.6 percent in April. Longer-term (5- to 10-year) median inflation expectations were unrevised at 3.0 percent, up 0.1 percentage point from May.
  • 06.17.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment slipped down from an index level of 74.3 in May to 71.8 in June, but remains up from 69.8 in April. Both the current conditions and expectations components decreased during the month. The current conditions component fell from 81.9 to 79.6 in June and is now below 80 for the first time since last October. Consumer expectations decreased from 69.5 to 66.8 in June as pessimism over future income and employment prospects grew. Median year-ahead inflation expectations edged down from 4.1 percent to 4.0 percent in June, while longer-term (5- to 10-year) median inflation expectations ticked up 0.1 percentage points to 3.0 percent.
  • 06.15.2011
  • CPI
  • The CPI rose at an annualized rate of 2.0 percent in May, settling down after five months of gasoline fueled increases that have left its near-term (6-month annualized) growth rate at an elevated 5.1 percent. Over the past year, the CPI is up 3.6 percent. Gasoline prices slipped down 21.1 percent in May, falling for the first time since last June, helping to pull overall energy prices down 11.2 percent during the month (household energy prices rose 5.9 percent in May, slightly less than over the past three months). Food prices rose 4.3 percent in May, roughly in line with its 12-month growth rate of 3.5 percent. Excluding food and energy prices, the (“core”) CPI jumped up 3.5 percent in May—its sharpest monthly increase since May 2006—helping to push its near-term (3-month annualized) growth rate up from 2.1 percent to 2.5 percent and add 0.2 percentage points to its 12-month growth rate (which now stands at 1.5 percent). Measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland—the median and 16 percent trimmed-mean CPI—rose 2.1 percent and 2.8 percent, respectively, matching their respective 6-month trends. Over the past 12 months, the median CPI is up 1.5 percent and the 16 percent trimmed-mean CPI is up 1.9 percent. Another forward-looking measure of inflation—the sticky price CPI—rose just 1.7 percent in May, and is up 1.4 percent over the past year.
  • 06.14.2011
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods rose at an annualized rate of 2.5 percent in May, compared to an 11.5 percent growth rate over the previous six months and a 12-month growth rate of 7.3 percent. Producer prices for energy goods rose 19.8 percent during the month and accounted for most of the headline increase, but that was the smallest monthly increase in energy goods over the past 8 months. Interestingly, producer prices for finished consumer foods fell 16 percent in May and are up 4.0 percent over the past year. Excluding volatile food and energy items, producer prices increased 2.1 percent in May, matching its 12-month growth rate. At earlier stages of production, pricing pressure was mixed, as core intermediate goods rose 11.2 percent and core crude goods slipped down 10.2 percent in May.
  • 05.27.2011
  • Personal Consumption Expenditure
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 4.1 percent in April, following a 4.7 percent increase in March as food and energy prices continue to rise sharply. Over the past year, PCE prices are up 2.2. percent. Excluding volatile food and energy prices (core PCE), the index rose 2.2 percent in April, after a downwardly revised 1.4 percent increase in March. The near-term (3-month) annualized growth rate in the core PCE stands at 1.9 percent as of April, 0.9 percentage point above its 12-month growth rate of 1.0 percent.
  • 05.27.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment was revised up from 72.4 to 74.3 in late May, up from 69.8 in April. The consumer expectations component was revised up from 67.4 to 69.5 in May, a nearly 8 point gain compared to April’s value, but remain below February’s level of 71.6. The current conditions component actually ticked down slightly, from 82.5 in April to a revised 81.9 in May. Importantly, median year-ahead inflation expectations were revised down from the preliminary estimate of 4.4 percent for May to 4.1 percent, while longer-term (5- to 10-year) median inflation expectations were revised down 0.1 percentage point to 2.9 percent, unchanged from April’s level.
  • 05.13.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment increased to 72.4 in May, up from 69.8 in April. The overall increase was due to a jump in the expectations component, which rose from 61.1 to 67.4 in May, and came despite a 2.3 point tick down in the current conditions component. Consumer expectations have risen steadily over the past three months, but remain below February’s level of 71.6. Median year-ahead inflation expectations actually edged down to 4.4 percent in May, compared to 4.6 percent in April. The release noted that the tick down was connected to an expectation that gas prices will decrease. Longer-term (5- to 10-year) median inflation expectations ticked up to 3.0 percent from 2.9 percent in April.
  • 05.13.2011
  • CPI
  • The headline CPI rose at an annualized rate of 5.2 percent in April, its fifth consecutive monthly increase in excess of 4.5 percent. Over the past six months, the CPI is up 5.1 percent, compared to its 12-month growth rate of 3.2 percent. Much of the overall increase has been tied to energy price increases over the past five months or so and April was no different, as energy prices rose roughly 30 percent, accounting for nearly half of the overall increase. Food prices, which have also been elevated recently, rose 6.4 percent in April (interestingly, it was the smallest monthly increase this year). The “slow-down” (if you can call it that) in food prices was mainly due to a 12.4 percent decrease in fruits and vegetables prices, which followed four consecutive double-digit increases. Excluding food and energy prices, the index rose a much more modest 2.2 percent in April. Still, the core CPI is up 2.1 percent over the past three months, and its 12-month growth rate stands at 1.3 percent, up 0.7 percentage points from a recent low of 0.6 percent in October 2010. The Federal Reserve Bank of Cleveland's measures of underlying inflation were slightly less sanguine in April. The median CPI rose 2.8 percent during the month, while the 16 percent trimmed-mean measure jumped up 3.3 percent. Recently, the trimmed-mean CPI has outpaced the median. So much so, that the 3-month annualized growth rate in the trimmed-mean has risen to 3.4 percent, 1.1 percentage points over the near-term trend in the median CPI (which stands at 2.3 percent). Over the past 12 months the trimmed-mean CPI is up 1.7 percent, while the median CPI has increased 1.4 percent. Recently, there has been some upward pressure on the right tail of the price change distribution, and the trimmed-mean has picking up on some of those rapid price increases. Roughly 22 percent of the overall index rose at rates greater than 5.0 percent in April, in line with its average over the past 3 months (23 percent). April’s price change distribution looks fairly similar to the average over the first three months of the year, but its definitely moved away from its disinflationary stance seen in 2010.
  • 04.29.2011
  • PCE
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 5.1 percent in February, as food and energy prices continue to rise sharply. In the first quarter, headline PCE rose 3.8 percent and is up 1.6 percent over the last 4 quarters. Excluding volatile food and energy prices (core PCE), the index rose 1.6 percent in March, following increases of 2.0 percent and 2.1 percent in February and January, respectively. The near-term (3-month) annualized growth rate in the core PCE stands at 1.9 percent as of March, 1.0 percentage point above its 12-month growth rate of 0.9 percent.
  • 04.29.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment was virtually unchanged during the April revision, adding 0.2 points to 69.8, though it’s below February’s level of 77.5. Much of April’s sentiment gain relative to March came from an increase in the consumer expectations component, which rose from 57.9 to 61.6. The current economic conditions component was flat at 82.5 during the month. Median year-ahead inflation expectations remained at 4.6 percent during the April revision and were unchanged from March's level. Encouragingly, longer-term (5- to 10-year) median inflation expectations were unrevised at 2.9 percent in April, holding onto a 0.3 percentage point decline from March’s level. This may suggest that households see recent energy and commodity price shocks as transitory relative price changes and not signals of higher future inflation.
  • 04.15.2011
  • CPI
  • The headline CPI jumped up at an annualized rate of 6.8 percent in March, matching its increase in February. As has been the case recently, food and energy prices accounted for a large portion of the overall increase in March (the release noted that nearly three-fourths of the overall increase was due to food and energy price increases). Food price gains have accelerated in recent months, increasing 7.5 percent over the past three months (January through March), compared with an increase of 1.6 percent over the three months prior (Octover through December). Energy prices, driven largely by gasoline price increases, have also accelerated in recent months. Excluding food and energy prices, the index rose a much more modest 1.6 percent in March, compared to a 2.4 percent rise in February. The core CPI has risen 2.0 percent over the last three months and is up 1.2 percent over the past year. Our measures of underlying inflation—the median CPI and 16 percent trimmed-mean CPI—rose 1.6 percent and 3.0 percent, respectively. Over the past two months, these two measures have disagreed markedly, with the average increase in the trim 1.4 percentage points above the median. This has pushed up the near-term (3 month) growth rate in the trim up to 3.2 percent, while the median is only 2.0 percent over the same period. It appears that the right tail of the distribution has grown fat recently, and the 16 percent trimmed-mean CPI is picking up on that skewness. Roughly 14 percent of the overall index rose at rates above 10 percent in March, and the only item in that bunch not directly related to food and energy price increases was car and truck rental (which appears to be noise; spiking up after two relatively large monthly declines).
  • 04.15.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment rebounded slightly in April, rising 2.1 index points to 69.6, following a 10-point dip down to 67.5 in March. The release noted that while the recent run-up in gas and food prices may slowdown consumption, “?consumers have adopted a more moderate reaction to rising gas prices than in 2008.” Much of April’s sentiment gain came from an increase in the consumer expectations component, which rose from 57.9 in March to 61.2, but is still well below its recent high of 71.6 in February. Interestingly, median year-ahead inflation expectations remained at 4.6 percent despite further increases in gasoline prices. More importantly, longer-term (5- to 10-year) median inflation expectations actually reversed March’s jump up to 3.2 percent, falling back down to 2.9 percent in April. This may suggest that households see recent energy and commodity price shocks as transitory relative price changes and not signals of higher inflation in the future.
  • 03.28.2011
  • PCE Price Index
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 4.9 percent in February, as energy prices continued to spike (rising 51 percent during the month). Food prices also rose relatively sharply in February—up nearly 10 percent—but have risen just 2.4 percent over the past year, matching its 10-year annualized trend. On a year-over-year basis, headline PCE prices are up 1.6 percent. Excluding volatile food and energy prices (core PCE), the index rose 1.9 percent during the month following an upwardly revised 2.0 percent increase in January. The near-term (3-month) annualized growth rate in the core PCE stands at 1.3 percent as of February, slightly above its 12-month growth rate of 0.9 percent, but still below its long term (10-year) growth rate of 1.8 percent. Looking just at the index of market-based price changes shows that the (market-based) core PCE rose 2.1 percent in February, a slight acceleration from January’s 1.4 percent increase, though the 12-month growth rate in this series matches the “official” core PCE growth rate of 0.9 percent.
  • 03.25.2011
  • Consumer Sentiment
  • According to the latest release from the University of Michigan, its Index of Consumer Sentiment was revised down in late March, from a level of 68.2 to 67.5. The new level reflects a full 10-point decline from February’s level of 77.5. The release noted that the quick erosion in confidence was largely due to rising gas prices and was “concentrated among lower-income households.” Also, the release noted that the fewest consumers on record expected nominal income increases over the year to come. Much of the overall decline in confidence came as the expectations component fell from a level of 71.6 in February to 57.9 in March, while the current conditions component slipped down 4.4 points to 82.5 during the month. True to its historic correlations, as food and energy prices rise, median one-year-ahead inflation expectations jumped up, too—from 3.4 percent to 4.6 percent in March. Still, these levels are below the recent peak of 5.2 percent set during the mid-2008 oil price shock. Longer-term expectations (which were unchanged in the March revision) edged up from 2.9 percent in February to 3.2 percent in March, and remained 0.2 percentage point below their mid-2008 levels. As longer-term expectations remained somewhat anchored, this may be tentative evidence that consumers do not see recent relative prices changes as persistent increases in inflation.
  • 03.17.2011
  • Consumer Price Index
  • The headline CPI jumped up at an annualized rate of 6.8 percent in February, and while food and energy price increases were significant contributors to the overall increase, there is some evidence of broad-based price gains. Energy prices rose 48.5 percent in February, and in contrast to previous months, household energy prices rose alongside motor fuel prices. Still, over the past 12 months, household energy prices are up just 1.5 percent. Food prices rose 6.8 percent in February (their largest monthly increase since September 2008), as five out of the six major grocery store groups posted increases.

    Excluding food and energy prices, the index rose 2.4 percent in February, outpacing its near-term (3-month) growth rate of 1.8 percent. Over the past 12 months, the “core” CPI is up 1.1 percent. Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland—the median CPI and the 16 percent trimmed-mean CPI—showed some interesting disagreement in February, as the median rose 2.4 percent, while the trim was up 3.8 percent during the month. February’s increase in the trimmed-mean measure pushes up its near-term (3-month) growth rate to 2.6 percent, somewhat elevated compared to a 1.9 percent increase in the median over that time period. Over the past year, the median is up just 1.0 percent, and the trim has risen just 1.2 percent.

    Digging into the price-change distribution reveals why the trim was a little higher than the median in February. Nearly half of the overall index (by expenditure weight) rose at rates above 3.0 percent in February (the highest level since September of 2008), compared to an average of 23 percent over the prior six months. Further out on the upper tail, nearly 17 percent of the market basket rose at rates above 12 percent in February, and the 16 percent trimmed-mean picked up on some of that. On the other end of the distribution, just 8 percent of the index posted outright price declines, in stark contrast to the average over the prior six months of 32 percent.

  • 03.11.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment took a large hit in early March as gas prices eroded consumer confidence. The index fell 9.3 index points (or 12 percent) to a level of 68.2, its lowest level since October 2010. The decrease came as the expectations component fell from 71.6 to 58.3 (19 percent), its first foray below 60.0 since March 2009. The release noted that the decrease in expectations was largest at the lower end of the income distribution. The current conditions component edged down modestly relative to expectations, slipping down from 86.9 in February to 83.6 in the preliminary estimate for March. Median one-year-ahead rose from 3.4 percent to 4.6 percent in March, still the recent peak of 5.2 percent set during the mid-2008 oil price shock. Longer-term expectations edged up from 2.9 percent to 3.2 percent, though remained 0.2 percentage point below mid-to-late 2008 levels.
  • 02.25.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up from an index level of 75.1 to 77.5 in February, as the release noted for the first time in six years respondents reported hearing more positive than negative economic news during the month. The current conditions component was relatively unchanged during the February revision, but at 86.9, it is roughly five index points higher than in January. Most of the movement during the February revision came from the expectations component, which was revised up from 67.6 to 71.6, its highest level since September 2009. Inflation expectations were largely unchanged in late February. Median one-year-ahead inflation expectations remained at 3.4 percent in February (the average expectation was 4.4 percent). Longer-term expectations remained anchored, with average expectations at 3.2 percent and the median expectation remaining at 2.9 percent.
  • 02.17.2011
  • CPI
  • The headline CPI jumped up at an annualized rate of 4.9 percent in January, following a 5.3 percent increase in December. Over the past 12-months the CPI is up 1.6 percent, but its near-term (3-month annualized) trend somewhat more elevated, at 3.9 percent. Energy commodity and food prices are exerting significant upward price pressure lately, and accounted for roughly two thirds of the overall increase in January (according to the Bureau of Labor Statistics). Food prices spiked in January, with the food at home index jumping up 9.3 percent (its largest increase since July 2008), as all six major food groupings posted increases. Excluding food and energy prices, the CPI rose 2.1 percent during the month, pulling up its near-term (3-month) annualized growth rate to 1.4 percent and its 12-month trend to 1.0 percent (from 0.8 percent). Price increases in apparel, airline fares, and medical care commodities were all particularly pronounced. The relatively volatile apparel index increased 13.3 percent in January (perhaps some pass-through from spiking cotton prices), posting only its third double-digit monthly increase since 2000. Airfares rose 29.6 percent in January, and have risen 33 percent over the past three months.

    Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland also picked up a bit in January, with the median CPI rising 2.0 percent and the 16 percent trimmed-mean CPI increasing 2.7 percent. Still, over the past 12 months, the median and trimmed-mean measures are up just 0.8 percent and 1.0 percent, respectively. A little more weight in the relative price-change distribution pushed out to the upper tail in January, with roughly 20 percent of the index (by expenditure weight) exhibiting price increases in excess of 5.0 percent, compared to an average of 12 percent in 2010. Roughly 20 percent of the overall index was also in the lower tail in January, shy of its 2010 average of 39 percent and its average over the previous three months (31 percent). Confirming the recent tick up in our other measures of underlying inflation (perhaps back to more “normal” growth rates), the sticky price CPI rose 2.0 percent in January and is trending at a rate of 1.5 percent over the past three months, compared to its year-over-year growth rate of 1.0 percent. That tick up in the trend is not just shelter components (which have risen modestly lately), as the sticky price CPI ex shelter rose 2.4 percent in January and is up 1.6 percent over the past three months.

  • 01.31.2011
  • Personal Income
  • Nominal personal income rose 0.4 percent (non-annualized) in December, following an upwardly revised 0.4 percent gain in November, and is up 3.4 percent over the past year. Nominal disposable income—income less current taxes—rose 0.4 percent in December. After adjusting for price changes, “real” disposable income ticked up 0.1 percent, and is up 2.1 percent over the past year. Real personal consumption expenditures posted its eighth consecutive monthly gain, jumping up 0.4 percent in December. Real consumption is now trending at 2.8 percent over the past 12 months (its highest level since February 2007), and has been heading even higher recently, increasing at an annualized pace of 4.6 percent over the past three months. Personal savings as a percent of disposable income ticked down to 0.2 percentage point to 5.3 percent in December, continuing to shy away from a recent high of 6.3 percent in June.
  • 01.28.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up from 72.7 to 74.2 in late January, roughly unchanged from its level in December (74.5) and, unfortunately, from its level in January 2010 (74.4). The current conditions component slipped from 85.3 in December to 81.8 currently, while the expectations component improved slightly—from 67.5 to 69.3 in January. Still, expectations are well below its series average of roughly 80. Median one-year-ahead inflation expectations jumped up from 3.0 percent to 3.4 percent in January, largely on rising oil prices (average one-year-ahead inflation expectations rose from 3.9 percent to 4.2 percent). Longer-term expectations remained anchored, with average expectations at 3.2 percent and the median expectation ticking up 0.1 percentage point to 2.9 percent.
  • 01.14.2011
  • CPI
  • The headline CPI jumped up at an annualized rate of 6.2 percent in December, though the release noted that spiking gasoline prices accounted for roughly 80 percent of it. Food prices also rose in December—up 1.5 percent—largely on a 28.2 percent increase in fresh fruits and vegetables prices (which was likely weather-induced). On a year-over-year basis, the CPI is up 1.5 percent. Excluding food and energy prices, the index rose 1.1 percent during the month, outpacing its short-to-medium-term trends. Over the past three months, the core CPI is up 0.7 percent, compared to its 12-month growth rate of 0.8 percent. Shelter prices increased 1.6 percent in December, its largest increase since April 2009, driving most of the gain in core prices. Within shelter, rent of primary residence rose 2.7 percent, while OER was up 1.1 percent. Airfares and medical care prices also increased in December, though they were partially offset by declines in communication (down 6.6 percent), recreation (down 2.2 percent), and household operations and furnishings (down 0.7 percent). The Federal Reserve Bank of Cleveland's measures of underlying inflation trends—the median and 16 percent trimmed-mean CPI—also firmed up a little in December, rising 1.7 percent and 1.6 percent, respectively. Over the past three months, both series are outpacing their respective 12-month growth rates which stand at 0.6 percent for the median CPI and 0.8 percent for the trimmed-mean measure. The distribution of price-changes underlying these measures has also firmed up a little and is continuing to pull mass toward the 0 percent to 2 percent range. In November and December just 23 percent over the consumers’ marketbasket (by expenditure weight) exhibited outright price declines, compared to an average of nearly half of the index over the first six months of the 2010. That difference in weight is showing up as price increases between 0 percent and 2 percent, which have averaged 44 percent over the past two months, compared to 27 percent over the first six months of the year. The upper end of the price-change distribution hasn't moved much, as 22 percent of the overall index is rising at rates exceeding 3.0 percent, compared to a 23 percent average during the first six months of 2010.
  • 01.14.2011
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment slipped from an index value of 74.5 December to 72.7 in January, but remained just above its 2010 average level of 72.0. The decline came as the current conditions component fell from 85.3 to 79.8 in January, while the consumer expectations component continued to improve, rising 0.7 point to 68.2 (its highest level since June 2010). The release noted that January’s decline was, in large part, tied to increasing gas prices, as most respondents do not expect increases in their income, though they pushed up their near-term inflation expectations. One-year-ahead average inflation expectations ticked up 0.1 percentage point to 4.0 percent in January, while the median expectation jumped up 0.3 percentage point to 3.3 percent. That said, longer-term expectations remained anchored; with average expectations at 3.2 percent and the median expectation remaining at 2.8 percent.
  • 12.23.2010
  • PCE Prices
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 1.1 percent in November, compared to a 2.0 percent increase in October. Excluding food and energy prices (core PCE), the index rose 1.0 percent during the month and is up just 0.8 percent on a year-over-year basis. After excluding non-market-based items—such as financial services furnished without payment—the core PCE price index rose 1.1 percent in November, offsetting a 1.1 percent decline in October, and is up 0.8 percent over the past year.
  • 12.23.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment rose to an index value of 74.5 in late December, its highest level since June and second highest sentiment reading on the year. The current conditions component improved to 85.3, 3.1 points above November’s reading. The expectations component also increased, from 64.8 in November to 67.5 in December. The release suggested that some of the increase in sentiment was due to news on the tax cuts. One-year-ahead average inflation expectations ticked up 0.2 percentage point to 3.9 percent in December (though the median expectation was unchanged at 3.0 percent). Longer-term (five-to-10 year-ahead) average expectations edged up from 3.2 percent to 3.3 percent, though the median expectation remained at 2.8 percent.
  • 12.15.2010
  • CPI
  • The CPI rose at an annualized rate of 1.5 percent in November and is up 1.1 percent over the past 12 months. Energy prices rose in November, at 2.7 percent though, its smallest increase over the past five months. Food prices also rose modestly during the month, up 2.4 percent. Excluding food and energy prices, the “core” CPI rose 1.2 percent in November, somewhat higher than its annualized growth rate of 0.2 percent over the previous three months and slightly higher than its 12-month growth rate of 0.8 percent. November’s increase in the core CPI was driven largely by increases in shelter and airline fares, up 1.3 percent and 42.2 percent, respectively. That increase in airfares is its largest since mid-2008, though that series is relatively volatile so its hard to make too much of that. On the other hand, the increases in shelter were driven by a 2.6 percent rise in rent and 1.4 percent increase in OER (Owners Equivalent Rents), the largest monthly gains in both of these relatively stable series since early 2009. The Federal Reserve Bank of Cleveland’s measures of underlying inflation, the median CPI and 16 percent trimmed-mean CPI, were in agreement with the core CPI, rising 1.0 percent and 1.1 percent, respectively in November. Both the median and the trim outpaced their 3-month growth rates in November and were above their longer-term (12-month) trends which are ranging between 0.5 percent and 0.8 percent. Interestingly, it appeared that the underlying component price-change distribution, while centered between 0 percent and 1 percent, tightened up a bit in November. Compared to its year-to-date average of roughly 40 percent, just 23 percent of the consumers’ marketbasket (by expenditure weight) exhibited outright price declines. Instead, it seems that much of that weight shifted up a bin, as roughly 30 percent of the index rose above zero but below 1.0 percent in November (compared to its year-to-date average of 16 percent). The upper-end of the price-change distribution (price increases above 3.0 percent) was fairly similar to its 2010 average of 23 percent, holding nearly 20 percent of the consumers’ marketbasket. Confirming some of the slight firming in November relative to the past three months; the sticky price CPI—an index of those items that change price infrequently—rose 1.7 percent during the month, outpacing its annualized growth rate of 0.8 percent over the prior three months and posting its largest annualized monthly increase since April 2009, though that is still below its long-term (5-year average) of 2.2 percent.
  • 12.14.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods jumped up at an annualized rate of 9.7 percent in November, largely due to an increase in energy prices (up 27.7 percent). On a year-over-year basis, the PPI is up 3.5 percent. Excluding food and energy prices, the (“core”) PPI rebounded somewhat from a 6.7 percent decrease in October, rising 3.5 percent in November (providing further evidence that October’s decline was noise). Still, the core PPI trending at an annualized growth rate of −0.7 percent over the past three months and is up just 1.3 percent over the past year. Further back on the line of production pricing pressure was to the upside in November, as core intermediate goods rose 8.2 percent and core crude goods spiked up 44.6 percent.
  • 12.10.2010
  • Import and Export Prices
  • Import prices jumped 1.3 percent in November, marking a fourth consecutive increase and the largest since November 2009. Petroleum imports rose in excess of 4.0 percent for a second straight month, and nonfuel import prices advanced 0.8 percent. Although growth in import prices has picked up pace recently and prices are up 3.7 percent on a year-over-year basis, the index is still considerably below its July 2008 peak (by roughly 13 percent).

    Export prices also took off in November, jumping 1.5 percent and lifting year-over-year growth from 5.8 percent to 6.5 percent. The most notable increases occurred in foods, feeds and beverages, which rose a steep 6.6 percent in November and have climbed nearly 16 percent in just the past six months. Additionally, agricultural exports saw their largest price increase on record, soaring 8.0 percent over the month.

  • 11.24.2010
  • PCE Prices
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 2.0 percent in October, compared to an increase of 1.2 percent in September. Excluding food and energy prices (core PCE), the index was roughly flat (up 0.1 percent on an annualized basis). On a year-over-year basis, the core PCE price index is up just 0.9 percent. Interestingly, after excluding non-market-based items—such as financial services furnished without payment—the core PCE fell 1.3 percent during the month and is up just 0.7 percent over the past year.
  • 11.17.2010
  • CPI
  • The CPI rose at an annualized rate of 2.8 percent in October, though the release noted that 90 percent of that increase was due to spiking gasoline prices (household energy prices jumped up as well). Measures of underlying inflation trends continued to hover around zero. The core CPI was flat during the month, while the median and 16 percent trimmed-mean measures rose 1.1 percent and 0.6 percent, respectively. Newswires will likely highlight that the 12-month percent change in the core CPI fell to a fresh all-time low of 0.6 percent in October (the data goes back to 1957). We might stress that the core CPI is looking more like the longer-run trends in the median and the trimmed-mean CPI, which are up 0.5 percent and 0.8 percent over the past twelve months. Over the past six months, these measures of underlying inflation are ranging between 0.8 percent and 0.9 percent. The underlying price-change distribution looked fairly similar to its average over the past six months (at least on the low end), with roughly 50 percent of the index (by expenditure weight) rising at rates of less than 1.0 percent. On the upper-end, just 12 percent of the consumers’ market basket exhibited price increases in excess of 3.0 percent, down from an average of 23 percent over the six months prior. Among the major components, OER increased at an annualized rate of 1.0 percent in October, somewhat higher than its near-term (3-month) annualized growth rate of 0.5 percent. Rent of primary residence rose 0.6 percent in October. Also, medical care services rose 2.0 percent during the month, though this is somewhat below its 12-month growth rate of 3.6 percent. It appears that the prices of a few discretionary spending components (recreation, apparel, household furnishing) continued to decrease in October. In fact, recreation prices have fallen in each of the past four months and is now down 1.0 percent on a year-over-year basis. An alternative glance at the consumers’ market basket, by price-stickiness, revealed that core flexible prices (those items more likely to exhibit transitory price changes) fell at an annualized rate of 4.6 percent in October. The more forward-looking sticky-price components of the market basket rose 0.8 percent during the month, and have really moved around a lot over the past six months or so (which isn’t much of a surprise given that they’re “sticky”). Over the past 12 months, the series is up 0.7 percent, which is consistent with the softness seen in our other measures of underlying inflation.

  • 11.16.2010
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods increased at an annualized rate of 5.5 percent in October, matching September’s increase. While September’s overall jump up was largely driven by increasing food prices, the increase in October was due to rising energy prices. Over the past 12 months, the index is up 4.3 percent. Excluding food and energy prices, the (“core”) PPI plummeted 6.7 percent, its third sharpest decline since the series began in 1974. However, on a not-seasonally-adjusted basis, the core PPI actually rose 7.1 percent and combined with some historically larger unadjusted price increases in October, hints at a seasonal adjustment issue. On a year-over-year basis the core PPI is still up 1.5 percent.

  • 11.12.2010
  • Consumer Sentiment
  • The University of Michigan Index of Consumer Sentiment ticked up in early November from 67.7 to 69.3, its highest level since June. Much of the overall gain came from a 3.1 point increase in the current conditions component (which rose from 76.6 to 79.7), as consumer expectations edged up only 0.8 point to 62.7. One-year-ahead average inflation expectations rose from 3.3 percent to 3.6 percent in November, while the median year-ahead expectation increased from 2.7 percent to 3.0 percent. Longer-term (5-10 year-ahead) expectations edged northward on average—from 3.0 percent to 3.2 percent in November—but the median expectation was unchanged at 2.8 percent.
  • 11.01.2010
  • Personal Income
  • Nominal personal income decreased 0.1 percent (non-annualized) in September, its first decrease in a year. Nominal disposable income—income less current taxes—also fell in September, ticking down 0.2 percent, following a 0.4 percent jump up in August. Over the past 12 months, disposable income is up 3.0 percent. After adjusting for price changes, “real” disposable income more than reversed a 0.2 percent gain in August, falling 0.3 percent in September. Real personal consumption rose for the fifth consecutive month after ticking up 0.1 percent in September. The series’ 12-month growth rate jumped up to 2.3 percent in September from 1.4 percent in August. As disposable income slipped in September and consumption continued on its uptrend, the personal saving rate ebbed from 5.6 percent to 5.3 percent.

  • 11.01.2010
  • PCE
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 1.0 percent in September, compared to an increase of 2.3 percent in August. Excluding food and energy prices (core PCE), the index was roughly flat (up 0.3 percent on an annualized basis). However, this followed a downward revision in August—from a 1.4 percent gain to 0.8 percent. increased 1.4 percent. That revision to July and August’s data knocked the 12-month growth rate in the core PCE down from 1.4 percent to 1.3 percent through August. After adding in September’s flat reading, the 12-month growth rate ticked down another 0.1 percentage point to 1.2 percent.
  • 10.29.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was virtually unrevised in late October at 67.7 and is little changed from 68.2 in September. In fact, the series hasn’t moved much over the past 4 months, remaining stubbornly below its current cyclical peak in June of this year (at 76.0). One year-ahead average inflation expectations remained at 3.3 percent during the October revision, ticking up 0.3 percentage point from September. Longer-term (5- to 10-year-ahead) were stable during the month, as average expectations nudged down to 3.0 percent from 3.1 percent in September and were unchanged during the October revision.
  • 10.15.2010
  • CPI
  • Headline CPI rose at an annualized rate of 1.2 percent in September, as increases in food and energy prices (up 3.8 percent and 8.2 percent) contributed to the overall increase. Excluding those relatively volatile categories, the core CPI was unchanged during the month, pulling its 12-month growth rate down 0.1 percentage point to 0.8 percent in September. Our measures of underlying inflation, the median and 16 percent trimmed-mean measures, rose 0.6 percent and 0.9 percent, respectively in September. Those increases were slightly below each series’ short-term (3-month annualized) trend and more in-line with their 12-month growth rates of 0.5 percent for the median and 0.8 percent for the 16 percent trimmed-mean CPI. These series have been just north of flat through the first quarter of this year and are ranging between 0.4 percent and 0.7 percent. Digging a little further into the details, nearly 50 percent of the overall index (by expenditure weight) exhibited outright price declines in September, consistent with its average over the first five months of the year (47 percent), compared to an average of 34 percent over the prior three months. However, the upper tail of the distribution has remained relatively stable throughout the year (so far), with an average weight of 15 percent of the marketbasket. There are a couple of mentionable price moves in September. First, the price index for hospital services jumped up a whopping 23.8 percent (a series high with data back to 1997), pushing medical service prices up 9.5 percent (its largest monthly increase since the early 1990s). Also, it seems that those curiously strong increases in used car and truck prices are beginning to dissipate, as the series fell 7.6 percent in September, helping to edge its 12-month growth rate down to 12.9 percent, further away from its recent peak of 17.0 percent in July. Finally, rent of primary residence jumped up 1.6 percent during the month, its largest monthly increase since April 2009. However, owners’ equivalent rent (OER), the largest component of shelter, was virtually flat, rising just 0.3 percent at an annualized rate.
  • 10.15.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment ticked down slightly in early October, from 68.2 in September to 67.9. As the series has slipped from its peak in June of this year (at 76.0), most of the declines have come from the consumer expectations component. However, in October, expectations strengthened from 60.9 to 64.6, while current conditions fell from 79.6 to 73.0. According to the release, this reversal comes as respondents feel, “...prospects for the economy improved and prospects for personal finances and buying plans declined.” One year-ahead average inflation expectations rose 0.3 percentage point to 3.3 percent in October, with a sizeable 0.4 percentage point jump to 2.6 percent in the median expectation. Longer-term (5-10 year-ahead) were stable during the month, as average expectations nudged down to 3.0 percent from 3.1 percent in September, while the median expectation was flat at 2.7 percent.
  • 10.01.2010
  • Personal Consumption Expenditure
  • The Personal Consumption Expenditure (PCE) price index rose at an annualized rate of 2.8 percent in August, largely as energy prices jumped up 31.7 percent. Excluding food and energy prices (core PCE), the index increased 1.4 percent. Its 3-month annualized growth rate currently stands at 1.1 percent, 0.3 percentage point below its longer-term (12-month) growth rate.
  • 10.01.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment was revised up sharply in September, from a preliminary value of 66.6 to 68.2, though this is still a slight deterioration from 68.9 in August. While the current conditions component improved from 78.3 in August to 79.6 in September, consumer expectations slipped from 62.9 to 60.9 during the month, its lowest level in more than a year. Interestingly, the release noted that sentiment for lower income households (below $75k) improved during the month but that was swamped by a deterioration in sentiment among higher income households, hinting that some uncertainty about extension of the Bush tax cuts may be providing the restraint. One year-ahead average inflation expectations edged down 0.2 percentage point to 3.0 percent in September, though the median expectation fell from 2.7 percent to 2.2 percent (with the variance increasing from 18 to 21). Longer-term (5-10 year-ahead) average expectations were flat at 3.1 percent in September, while the median expectation ticked down from 2.8 percent to 2.7 percent.
  • 09.17.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment ticked down from an index value of 68.9 in August to 66.6 in September, on a 3.8 point drop in the consumer expectations component down to 59.1. Expectations have retreated from roughly 70 in June to its lowest level since March 2009. Interestingly, the release noted that the “entire decline” came from households with incomes above $75,000. One year-ahead average inflation expectations were edged down 0.1 percentage point to 3.1 percent in September, though the median expectation fell from 2.7 percent to 2.2 percent (with the variance increasing from 18 to 21). Longer-term (5-10 year-ahead) average expectations remained relatively well anchored during the month, increasing just 0.1 percentage point to 3.2 percent, but the median expectation was unchanged at 2.8 percent.
  • 09.17.2010
  • CPI
  • The CPI rose at an annualized rate of 3.1 percent in August, largely on an energy price spike (up 31.2 percent). Excluding food and energy prices (core CPI), the index was virtually unchanged in August, rising just 0.6 percent. Over the past three months, the core CPI is up 1.3 percent, which is a little higher than its 12-month growth rate of 0.9 percent. Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland, the median and 16 percent trimmed-mean CPI, rose 0.6 percent and 1.2 percent, respectively in August, roughly in line with their 3-to-12 month growth rates. While there were some unusual price movements this month (car and truck rental prices, infant and toddler apparel, among others), they occurred at both ends of the price change distribution. That distribution has tightened up over the past three months relative to the first five months of the year, as roughly 48 percent of the overall index has exhibited price changes in the tails of the distribution (rising at rates over 5 percent, or posting outright price decreases) from June to August, compared to an average of 62 percent from January through May. Importantly, the average weight in that lower tail (outright price declines) has shifted from near 50 percent over the first five months of the year to roughly 33 percent over the past three months.
  • 08.17.2010
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods rose in line with expectations at 2.4 percent (annualized) in July, owed to an 8.7 percent increase in consumer foods. July’s advance in PPI ends a three consecutive month decline in headline producer prices, causing year-over-year growth to rise from 2.7 percent to 4.1 percent. The core PPI, which excludes the fickle gas and food prices, advanced 3.7 percent in July—its largest increase in nearly eight months. Year-over-year growth in the core index grew from 1.1 percent to 1.5 percent up from the trend we have seen since last November of year-over-year growth around 1.0 percent. Further back in the production line, pricing pressures continued to be on the downside as core intermediate goods prices dropped another 4.5 percent in July and core crude fell 17 percent.
  • 08.13.2010
  • Consumer Price Index
  • The headline CPI increased at an annualized rate of 3.8 percent in July, though energy-price increases accounted for roughly two-thirds of the overall jump up. Food prices actually fell for the second consecutive month. Excluding food and energy prices, the core CPI rose 1.6 percent during the month, pushing up its six-month annualized growth rate from 0.6 percent to 1.1 percent, though its longer-term (12-month) trend remained at 0.9 percent. Measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland—the median and 16 percent trimmed-mean CPI—disagreed in July, rising 0.8 percent and 1.8 percent, respectively. Doubling the percentage trimmed, from 16 percent to 32 percent, pushes the annualized percent change down to 1.3 percent, a little more in line with the median. Nevertheless, through the first seven months of the year, the median and 16 percent trimmed mean are still running fairly soft and have only increased 0.4 percent and 0.6 percent, respectively. Elsewhere, disinflation is still evident, as the sticky-price CPI increased just 0.8 percent during the month, matching its three-month annualized growth rate. Also, core services prices—services less energy services—rose 1.2 percent in July, somewhat softer than their three-month annualized growth rate of 1.6 percent. On the other hand, core goods prices (commodities less food and energy), which are only up 1.0 percent over the past 12 months, jumped up 2.5 percent during the month.
  • 07.30.2010
  • Consumer Sentiment
  • Although the University of Michigan’s Index of Consumer Sentiment was revised up from 66.5 to 67.8 during the July revision, it’s still well below June’s index level of 76.0 and the lowest sentiment value since November 2009. Both the current conditions and consumer expectations components fell markedly during the month. In fact, consumer expectations—at an index value of 62.3—are the lowest since March 2009 (near the trough of the recession) prompting this statement in the release: “ ...consumers view their income and job prospects as extraordinarily weak and those bleak prospects have made consumers more cautious spenders.” Inflation expectations were steady in July, as one-year-ahead average inflation expectations remained at 3.3 percent and longer-term (5-10 year-ahead) expectations ticked up 0.3 percentage point to 3.4 percent (though the longer-run median expectation inched-up just 0.1 percentage point to 2.9 percent).
  • 07.16.2010
  • CPI
  • The headline CPI fell at an annualized rate of 1.6 percent in June, largely on decreasing gasoline prices. On a year-over-year basis the CPI is up 1.1 percent. Excluding food and energy prices (core CPI), the index rose 1.9 percent in June and is trending at annualized growth rate of 1.3 percent over the past three months, above its longer-term (12-month) growth rate of 0.9 percent. Measures underlying inflation produced by the Federal Reserve Bank of Cleveland, which have been trending a bit lower than the core CPI lately, continued to do so in June. The median CPI rose 1.2 percent in June, while the 16 percent trimmed-mean CPI rose just 0.3 percent. The median and trim have risen just 0.3 percent and 0.5 percent, respectively, since the beginning of the year and are ranging between 0.5 percent and 0.8 percent over the past 12 months. As has frequently been the case, all of the monthly volatility (noise) wasn't captured exclusively by excluding food and energy prices in June. Notably, mens’ and boys’ apparel prices shot up a record (going back to 1947) 31.2 percent in June, a price increase that smacks of a seasonal adjustment problem, given that those prices fell 14.2 percent before seasonal adjustment. Nevertheless, the underlying price-change distribution exhibited some firming relative to May, as 34 percent of the overall index rose at rates between 1 percent and 3 percent, compared to just 19 percent in May and an average share of 15.4 percent over the past three months.
  • 07.16.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment fell 9.5 points to an index value of 66.5 in early July, the largest plunge since October 2008 and the eighth largest in the sixty year history of the surveys. Over the past six months, the index has sporadically increased and dropped, but overall has lost more ground than it has gained. Although the index has climbed up from a trough of 55.3 in November 2008, it still sits well below its values throughout most of the 1990's and the 2000's leading up to the recent recession period. According to the release, “nearly every economic assessment and expectation included in the survey recorded a steep decline.” Only 39 percent of respondents, the smallest proportion ever recorded, anticipated an increase in their income during the year ahead, and the proportion that unfavorably rated economic policies rose to 42 percent in early July. One-year-ahead average inflation expectations rose 0.3 percentage point to 3.6 percent, and longer-term (5-10 year-ahead) expectations ticked up 0.4 percentage point to 3.5 percent. Median expectations for both periods inched up to 2.9 percent.
  • 06.28.2010
  • PCE
  • The PCE price index ticked down at an annualized rate of 0.4 percent in May, largely as energy prices fell sharply. Excluding food and energy prices, the “core” PCE rose 2.0 percent after advancing 1.1 percent in April, leaving its 12-month growth rate at 1.3 percent. The market-based core PCE price index—which excludes implicit prices and consumption expenses of nonprofits serving households”rose 1.6 percent in May, and is up just 1.0 percent over the past year.
  • 06.25.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment continued its upward push, rising from an index value of 73.6 in May to 76.0 in June (a slight increase over the early June estimate. The overall increase came as the current economic conditions component jumped up from 81.0 to 85.6, while the increase in the expectations component was more muted; from 68.8 in May to 69.8 in June. The expectations component has been relatively stagnant over the past year, up just 0.6 index point from last June. Inflation expectations slipped down slightly in June relative to May but were revised up from the preliminary report. One-year-ahead average inflation expectations fell from 4.1 percent in May to 3.3 percent in June (the median ticked down from 3.2 percent to 2.8 percent); while longer-run (5- to 10-year-ahead) average expectations slid down from 3.4 percent to 3.1 percent during the month (with the median edging down from 2.9 percent to 2.8 percent).
  • 06.17.2010
  • CPI
  • The overall CPI fell at an annualized rate of 1.9 percent in May, though that was largely due to declining energy prices (down 30.2 percent). Food prices were flat. The “core” CPI rose 1.5 percent during the month, which is its largest monthly gain since last October. On a year-over-year basis, the core CPI remained at 0.9 percent, which is still its lowest growth rate since 1961.The median and 16 percent trimmed-mean CPI were both virtually unchanged in May, rising at annualized rates of just 0.5 percent and 0.4 percent, respectively. On a nonannualized basis, the median CPI was unchanged for the fifth straight month and now eight out of the last 11 months. The 12-month growth rate in the median CPI remained at a paltry 0.5 percent, while the trim stayed at 0.9 percent. Underpinning the softness of the trimmed-mean measures relative to the core, was a continued shift in the mass of the price-change distribution toward the lower end. Perhaps the most striking feature of the distribution this month was that just 18 percent of the overall index (by expenditure weight) rose at rates exceeding 3.0 percent, its lowest share on record (back to 1967). As has been the case over the previous six months, a majority of the distribution (63 percent in May) either rose less than 1.0 percent or exhibited outright price decreases.
  • 06.16.2010
  • PPI
  • The Producer Price Index for finished goods slipped down at an annualized rate of 3.3 percent in May after a 1.3 percent decrease in April. On a year-over-year basis, the index ticked down from 5.4 percent to 5.1 percent in May. Energy and foods prices contributed to the overall decline during the month, falling 16.8 percent and 7.5 percent, respectively. Excluding those prices, the “core” PPI rose 2.8 percent in May—matching April’s gain—pushing its 12-month growth rate up 0.4 percentage point to 1.3 percent. Further upstream, pricing pressures were mixed, as core intermediate goods prices rose 3.4 percent, while core crude goods fell 17.2 percent.
  • 05.28.2010
  • The PCE Price Index
  • The PCE price index was virtually flat in April, inching up an annualized 0.2 percent after increasing 1.3 percent in March. On a year-over-year basis, PCE prices are up 2.0 percent. Excluding food and energy prices, the “core” PCE rose 1.0 percent after advancing 1.2 percent in March. The 12-month growth rate in core prices slipped down 0.1 percentage point in April to 1.2 percent, one of the lowest points of the series, which began in the 1960s.
  • 05.19.2010
  • Consumer Price Index
  • The headline CPI slipped down at an annualized rate of 0.8 percent in April, reversing its 0.8 percent gain in March. The overall index was pulled down in part by a 15.8 percent decline in energy prices. Excluding food and energy prices, the core CPI was flat during the month, ticking up just 0.6 percent at an annualized rate, which helped to pull its 12-month growth rate down to 0.9 percent (its smallest growth rate since January 1966). Measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland, the median and 16 percent trimmed-mean CPI, continued to come in flat, rising at annualized rates of just 0.1 percent and 0.2 percent in April. In fact, on a nonannualized basis, the median CPI has been unchanged for four consecutive months, and seven out of the past ten months. As a result, the 12-month growth rate in the median continues to crawl lower, and is down to 0.5 percent (yet another series low). The underlying component-price-change distribution seems to be exhibiting a tightening up of the extreme tails, with more mass heading toward the center of the distribution. Still, the lower tail (share of the overall index exhibiting price decreases) holds a relatively large amount of mass, nearly 40 percent in April. However, this is down from a somewhat more alarming 56 percent in March. On the upper end of the distribution, just 13 percent of the market basket exhibited price increases in excess of 4 percent in April, compared to an average of 22 percent over the past 12 months. Also, 36 percent of the index rose at rates between 0 and 2 percent, the largest share since February 2009.
  • 05.18.2010
  • PPI
  • The Producer Price Index for finished goods slipped down 1.3 percent (annualized rate) in April, following an 8.4 percent increase in March. The overall index has been bouncing around wildly as of late, but is unchanged as a whole over the last three months. Excluding volatile food and energy prices, the ldquo;core” PPI rose 2.8 percent in April, following two months of virtually unchanged readings. Still, on a year-over-year basis the core PPI is up just 1.0 percent. Further back on the line of production there was some evidence of pricing pressure, as core intermediate goods prices jumped up 13.5 percent and core crude goods prices jumped up 59.9 percent. Over the past 12 months these relatively noisy series are up 5.6 percent and 49.7 percent, respectively.
  • 05.03.2010
  • PCE
  • The PCE price index increased at an annualized rate of 1.1 percent in March, following a virtually unchanged reading in February. Over the past year, PCE prices are up 2.0 percent. Excluding food and energy prices (the core PCE), the index edged up just 0.4 percent, nearly matching its relatively subdued near-term trend (3-month growth rate) of 0.6 percent. The 12-month growth rate in the core PCE slipped down 0.1 percentage point In March and now stands at 1.1 percent.
  • 04.22.2010
  • PPI
  • The Producer Price Index for finished goods rebounded from a 6.5 percent (annualized rate) decrease in February, jumping up 8.4 percent in March. Food prices jumped up 32.5 percent in March, accounting for “over 70 percent of the increase” in the overall index according to the BLS. Energy prices also rose during the month, increasing 9.1 percent following a 29.6 percent decline in February. Excluding volatile food and energy prices, the “core” PPI was virtually unchanged in March, rising just 0.7 percent, and is up 1.9 percent over the past three months. Over the past 12 months, the headline PPI is up 6.0 percent, but the core PPI is up a paltry 0.9 percent. Further back on the line of production there was some evidence of pricing pressure, as core intermediate goods prices increased 9.1 percent and core crude goods prices jumped up 101 percent. Over the past 12 month these volatile series are up 4.0 percent and 44.6 percent, respectively.
  • 04.14.2010
  • CPI
  • The CPI increased a slight 0.8 percent (annualized rate) in March, following a flat reading in February. The release noted that the overall index was buoyed by an outsized jump in fresh fruits and vegetables prices (up 72.4 percent) which “accounted for 60 percent of the all items increase.” Excluding food and energy prices, the core CPI was virtually unchanged in March (up just 0.5 percent a.r.) and has risen a meager 1.1 percent over the past 12 months (its slowest growth rate since January 2004). Owners’ equivalent rent slipped down 1.3 percent in March and is now flat on a year-over-year basis, which has helped to pull down the core CPI. However, the recent price declines aren’t relegated to shelter. Many discretionary spending categories exhibited price decreases in March (apparel, household furnishings and operations, recreation, food away from home, and miscellaneous personal goods). In fact, 56 percent of the overall index (by expenditure weight) had decreasing prices in March. Over the past three months, roughly 51 percent (a majority) of the index has been in that lowest bin. Moreover, on the other side of the price change distribution, just 25 percent of the index rose at rates exceeding 3.0 percent, compared to an average of 52 percent in 2007 (the year leading up to the recession). As the price change distribution has shifted lower, so has the median CPI and 16 percent trimmed-mean CPI. The median CPI was nearly flat in March, slipping down 0.2 percent, while the trimmed-mean measure increased just 0.3 percent during the month. Over the past 3 months, the median CPI has been unchanged and the 16 percent trimmed-mean is up a mere 0.6 percent. Over the past 12 months, the median CPI is up just 0.6 percent (a record low) and the 16 percent trimmed-mean is up just 1.0 percent.
  • 03.29.2010
  • Personal Consumption Expenditures (PCE)
  • The PCE price index was flat in February, following a 2.0 percent (annualized rate) increase in January. Over the past year, PCE prices are up 1.8 percent. Excluding food and energy prices (the core PCE), the index was also virtually flat, ticking up at an annualized rate of just 0.4 percent during the month, nearly matching its relatively subdued near-term trend (3-month growth rate) of 0.5 percent. The 12-month growth rate in the core PCE slipped down 0.2 percentage point during February and now stands at 1.3 percent.
  • 03.26.2010
  • Consumer Sentiment
  • The University of Michigan’s index of consumer sentiment was revised up 1.1 points in late March to an index value unchanged from February’s reading of 73.6. Though this is still well below the levels seen in the years leading up to the start of the recession, it is a vast improvement from the cyclical low of 55.3 reached in November 2008. The current conditions component of the release was revised up 1.6 points to 82.4, its highest level since March 2008. The consumer expectations component was also revised up, by 0.7 point, though it is still slightly lower than February’s reading. One-year-ahead average inflation expectations were revised down from 3.5 percent to 3.4 percent in March, down 0.2 percentage point (pp) from February. The longer-run (5- to 10-year-ahead) expectations remain at 3.1 percent, 0.2 pp lower than February’s reading.
  • 03.18.2010
  • CPI
  • The CPI was flat (0.0 percent annualized rate) during the month, as energy prices slipped down 6.3 percent in February, following a 39 percent jump in January. The core CPI edged up 0.6 percent (annualized rate) in February, and has only ticked up 0.1 percent over the past three months, pulling its 12-month growth rate down from 1.6 percent in January to 1.3 percent. Measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland—the median and 16 percent trimmed-mean CPI—were mixed in February. The median CPI actually posted its first annualized monthly decrease since December 1982, ticking down 0.3 percent in February. The 16 percent trimmed-mean CPI increased a slight 0.5 percent. On a year-over-year basis, the trim is up 1.1 percent, while the median CPI has risen just 0.8 percent (a series low). Softness was evident in the price change distribution, as a majority of the consumers’ marketbasket (51 percent) posted outright price declines in February. Categories of note in the lower tail: apparel, household furnishings and operations, personal care services, recreation, and some of the regional OER indexes. On the other end of the distribution, a little over 23 percent of the index (by expenditure weight) rose at rates exceeding 3 percent, with 21 percent rising at rates greater than 5 percent. In this tail, large and continued increases in used auto prices and medical care commodities is helping to hold up the overall index.
  • 03.17.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods slipped down 6.5 percent (annualized rate) in February, reversing course after four consecutive increases. Much of the pattern in the overall PPI in recent months has been driven by swings in energy prices, which spiked up 82.5 percent in January only to fall 29.6 percent in February. Excluding volatile food and energy prices, the “core” PPI was virtually unchanged in February, rising just 0.7 percent. Over the past 3 months, the core PPI is up 1.6 percent, slightly higher than its 12-month growth rate of 1.0 percent. Further back on the line of production, pricing pressure was mixed as core intermediate goods prices jumped up 11.4 percent, while core crude goods prices decreased 6.9 percent.
  • 03.12.2010
  • Consumer Sentiment
  • The University of Michigan’s Index of Consumer Sentiment slipped 1.2 points in March to 72.5 according to the preliminary report. This was the second consecutive small decline, but the index remains more than 15 points above its year-ago level and just 1.9 points below January’s recent high of 74.4. Both components of the index contributed to its decline, with current conditions dropping 1.0 point and consumer expectations declining 1.2. While sentiment has shown considerable improvement from the recession lows recorded more than a year ago, it has moved horizontally during the past six months with only small monthly variations. According to the release, consumers continued to report improvement in the overall economy in early March, but nonetheless expected tough times to persist for the remainder of the year. Consumers were less positive about prospects for declines in unemployment, and the majority expect some setbacks rather than uninterrupted economic growth over the next five years. Inflation expectations were little changed from February. One-year-ahead average inflation expectations ticked down 0.1 percentage point to 3.5 percent in March, while the longer-run (5- to 10-year-ahead) expectations pulled back 0.2 percentage point to 3.1 percent.
  • 03.01.2010
  • PCE
  • The PCE price index rose 2.1 percent (annualized rate) in January, following an upwardly revised 1.7 percent increase in December. PCE prices are up 2.1 percent on a year-over-year basis for the second straight month. Excluding food and energy prices, “core” PCE was virtually unchanged in January, at 0.1 percent, following a 1.1 percent increase in December. The 12-month growth rate of core PCE ticked down one percentage point to 1.4 percent, while over the past 3 months core PCE is up only 0.2 percent, the lowest level in a year.
  • 02.19.2010
  • CPI
  • The headline CPI jumped up 2.0 percent (annualized rate) in January, mostly on a spike up in energy prices (up 39 percent). However, the real story is the first appreciable decline in the core CPI index—falling 1.6 percent in January—since December 1982, pulling its 3-month annualized growth rate to zero and its 12-month growth rate down 0.2 percentage points to 1.6 percent. The release pointed to decreases in shelter, new vehicles, and airline fares as the culprits for a decrease in the core during the month. Measures of underlying inflation produced by the Federal Reserve Bank of Cleveland, the median CPI and 16% trimmed-mean CPI, rose 0.5 percent and 1.0 percent, respectively in January. These readings are very much in-line with where our measures have been over the past few months. The 3-month growth rate in the median is at 0.6 percent, while the trim is up 1.1 percent over the last three months. Even the underlying component distribution looks very similar. In January, roughly 60 percent of the index either rose at rates less than 1.0 percent or posted outright price declines, compared to an average of 59 percent over the last four months. The upper end of the distribution—with 27 percent of the consumers’ marketbasket rising at rates exceeding 3.0 percent—is nearly identical to that of the three months prior to January.
  • 02.18.2010
  • PPI
  • The Producer Price Index (PPI) for finished goods jumped up 18.3 percent (annualized rate) in January, largely on a spike-up in energy prices (up 82.5 percent). On a year-over-year basis, the PPI is up 4.6 percent. Excluding food and energy prices, the “core” PPI rose 4.3 percent during the month, outpacing its longer-term trends: its 3-month growth rate (3.3 percent), 6-month growth rate (1.1 percent) and 12-month growth rate (1.0 percent). Upstream, both core intermediate and core crude goods prices increased in January, rising 6.3 percent and 115 percent, respectively. However, these series are typically more volatile than the finished goods series on a month-to-month basis and caution should be used when interpreting the monthly price movements.
  • 02.01.2010
  • PCE
  • The PCE price index increased at an annualized rate of 1.2 percent in December, down from a 3.1 percent increase in November. On a year-over-year basis, PCE prices are up 2.1 percent. Excluding food and energy prices, “core” PCE rose a slight 0.9 percent during the month, after a virtually flat November. The 12-month growth rate in core PCE is up 1.5 percent, though over the past 3-months it has been trending slightly lower (1.2 percent).
  • 01.15.2010
  • Consumer Price Index
  • The CPI rose at an annualized rate of 1.6 percent in December, as both food and energy prices posted modest increases. Over the past 12 months, the CPI has risen 2.7 percent. The core CPI increased 1.4 percent, buoyed by a 35 percent increase in used car and truck prices, which accounted for roughly half of the overall increase in the core. The unusual strength in used car and truck prices over the past five months (up nearly 31 percent) has been somewhat of a mystery. Initially, the story read as if the CARS program negatively impacted used auto supply, driving up auction prices. However, it's hard to imagine that this is still the case. Perhaps the story now is that there has been some substitution away from new vehicles recently, possibly due to credit constraints, as some used car purchases are cash transactions. Either way, new vehicle prices slipped down 3.1 percent in December. The core CPI rose 1.8 percent over the last year but has been trending down slightly, as the three-month growth rate is up a mere 1.3 percent. Elsewhere, we've also been keeping a close eye on rents lately, which were virtually unchanged during the month, as OER and rent of primary residence each slipped down just 0.2 percent. Measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland, the median and the 16 percent trimmed-mean CPI, rose 0.6 percent and 1.1 percent, respectively, in December, consistent with recent softness seen over the past six months or so. In December, the bulk of the consumer market basket (by expenditure weight) continued to reside on the low end of the distribution, as 40 percent of the overall index posted outright price decreases and 23 percent rose at rates between 0 and 1 percent. Over the past six months, the average share of the market basket exhibiting declines has been 42 percent. On the other end of the distribution, just 24 percent of the market basket rose at rates exceeding 3 percent in December, leaving just 13 percent in the broad sweet-spot between 1 percent and 3 percent.
  • 09.16.2009
  • Consumer Price Index
  • The CPI jumped up 5.5 percent (annualized rate) in August, almost entirely on a spike in gasoline prices (the BLS says roughly 80 percent of the increase in the overall index was due to the increase in gas prices). Still, the 12-month growth rate in the series is down -1.5 percent. The core CPI (excluding food and energy prices) rose 0.8 percent in August, pushing its 12-month trend down 0.1 percentage point to 1.4 percent. However, there were a couple rather curious price moves during the month. First, the price for new vehicles fell 14.7 percent in August, their largest monthly price decrease since the early 1970s. This is, in part, due to how the BLS calculated the effect of the CARS rebate on the price of new vehicles. Also, used car and truck prices jumped up 25 percent in August (their largest increase since the 2004). A seasonal adjustment usually tamps down August used car prices, and this month was not an exception, though without seasonal adjustment used cars prices jumped up an outsized 33 percent. Now it could be that the CARS rebate motivated consumers to head to the dealership and those that didn't qualify for the rebate ended up getting a “cherry of a deal” on a used car, but it could simply be a measurement error as well (perhaps because the sample may have been skewed). Elsewhere, OER (Owners’ equivalent rent), which comprises roughly 25 percent of the overall CPI market basket, rose 1.0 percent in August after a virtually flat reading in July. The measures of underlying inflation trends produced by the Federal Reserve Bank of Cleveland, the median CPI and the 16 percent trimmed-mean CPI, rebounded a little from July’s relatively low readings (both increased 0.2 percent). The median CPI rose 1.8 percent in August, while the 16 percent trimmed-mean CPI was up 1.3 percent. Over the last 12 months, they are up 1.8 percent and 1.1 percent, respectively. The underlying price change distribution showed less softness in August, as roughly 30 percent of the index (by expenditure weight) exhibited outright price decreases, compared to nearly one-half of the index in July.
  • 09.15.2009
  • Producer Prices
  • The Producer Price Index (PPI) for finished goods jumped up 23.1 percent in August, continuing to exhibit large energy-induced price swings. In July, the PPI fell 9.9 percent after jumping up 23.3 percent in June. The core PPI, which strips away food and energy prices in an effort to lessen the volatility of the series, rose 2.1 percent in August, following a 1.4 percent decrease in July. Compared with August 2009, the core PPI is up 2.3 percent. Further back on the assembly line, both core intermediate and core crude goods prices increased in August, rising 7.2 percent and 102 percent, respectively. However, both series are relatively volatile and are still posting solidly negative growth rates over the past 12 months.
  • 08.28.2009
  • Personal Consumption Expenditures
  • The PCE price index rose just 0.4 percent (annualized rate) in July, following an energy-price-induced 6.7 percent jump in June. Year-over-year, PCE prices are down 0.8 percent (an all-time low). Excluding food and energy prices (core PCE), the index rose 1.2 percent during the month, following a 1.9 percent increase in June. Over the past 12 months, the core PCE has risen just 1.4 percent. It is worth noting that durable goods prices slipped down 5.6 percent, having been affected by the CARS rebates on new vehicles.
  • 05.15.2009
  • The Consumer Price Index
  • The Consumer Price Index (CPI) was virtually flat in April, falling a mere 0.2 percent at an annualized rate, pulled down in part by falling food and energy prices, which were down 2.2 percent and 25.1 percent, respectively. Over the past 12 months, the CPI has fallen 0.7 percent. Excluding food and energy prices (core CPI), the index jumped up 3.1 percent. Once again, the excise tax on tobacco was the smoking gun pushing up the core CPI. Tobacco prices jumped up 191.7 percent (annualized rate) as the tax went into effect on April 1. Early adopters raised prices in March, which led to a 251 percent increase. The median and 16 percent trimmed-mean underlying inflation measures seemed to disagree as well in April. The median CPI rose 2.1 percent in April and is up 2.6 percent over the past 12 months, while the 16% trim rose just 0.9 percent during the month and is up 2.1 percent over the past year. The price-change distribution revealed that roughly 25 percent of the consumer market basket exhibited price decreases this month, compared to 32 percent in March. At the same time, 17 percent of the index was in the upper tail (price increases above 5.0 percent), compared to 12 percent in March. Still, there is a significant amount of mass near the center of the distribution.
  • 05.15.2009
  • Consumer Sentiment
  • Consumer sentiment continued to improve in May, jumping up 2.8 index points to a value of 67.9 (its highest since September 2008), according to the preliminary release by the University of Michigan. Much of the gain was driven by an increase in the consumer expectations component, which rose from 63.1 to 69.0 in May. According to the release, roughly two-thirds of consumers surveyed were optimistic about the current fiscal stimulus programs. The current conditions component fell to 66.2 from 68.3 in April, though still above recent cyclical lows. One-year ahead and longer-term (5-10 years ahead) average inflation expectations ticked down in May, both falling from 3.1 percent in April to 2.9 percent in May.
  • 04.15.2009
  • Consumer Price Index
  • The CPI decreased at an annualized rate of 1.6 percent in March, pulling the 12-month growth rate in the series down to -0.4 percent. The CPI came in slightly under expectations, and news wires are likely to hit on the negative year-over-year number. Much of the headline decrease was due to decreases in energy prices, as fuel oil and other fuel fell 61.6 percent (annualized), and motor fuel prices decreased 42 percent during the month. Many food categories (dairy, meats, cereals, and fruits and veggies) posted price declines as well. Excluding food and energy, the index rose 2.1 percent in March, though the BLS cautions that over 60 percent of the increase in the core CPI was due to a nonannualized 11.0 percent jump (251.4 percent at an annualized rate) in tobacco and smoking products prices. The core CPI is up 2.2 percent over the past 3 months, and 1.8 percent over the past year. The measures of underlying inflation produced by the Federal Reserve Bank of Cleveland, the median CPI and 16 percent trimmed-mean CPI, rose 2.0 percent and 0.4 percent, respectively. The 16 percent trimmed-mean excluded most of the larger price increases contained in the CPI, as only 12 percent of the consumer market basket rose at rates greater than 5.0 percent, and concurrently picked up on some of the downward price momentum, as roughly 32 percent of the index exhibited outright price decreases. On a year-over-year basis, the median CPI is up 2.7 percent, while the trimmed-mean measure is up 2.3 percent.
  • 04.14.2009
  • Producer Price Index
  • The Producer Price Index (PPI) for finished goods fell much further than expected in March, decreasing at an annualized rate of 13.1 percent. March's decline, after gains of 1.4 percent (annualized rate) in February and 10.4 percent in January, pulled the 12-month growth rate in the PPI down to -3.6 percent from -1.6 percent in the previous month. The overall decrease was primarily due to falling energy and food prices, down 49.0 percent and 7.9 percent, respectively. The core PPI was unchanged from the previous month, and actually up 3.8 percent over the past 12 months. Further back on the line of production, core intermediate and core crude goods prices decreased, falling 4.1 percent and 18.0 percent, respectively.
  • 03.02.2009
  • Personal Consumption Expenditures
  • The PCE price index rose 2.4 percent (annualized rate) in January, after three consecutive monthly declines, but its 12-month growth rate still ticked down 0.1 percentage points to 0.7 percent. The PCE price index excluding food and energy prices (core PCE) rebounded from a 0.2 percent decrease in December, rising 1.4 percent in January. Durable goods prices fell 1.4 percent in January, marking their sixth consecutive monthly decline, while nondurable goods prices jumped up 7.8 percent, after posting double-digit price decreases over the three months prior. The 12-month growth rate in the core PCE now stands at 1.6 percent.
  • 11.25.2008
  • Housing Price Indexes
  • The quarterly S&P/Case–Shiller HPI (seasonally adjusted index) fell 3.7 percent (nonannualized) in the third quarter, compared to a 3.0 percent decline in the second quarter. The four–quarter growth rate dropped to a new low of −16.6 percent. Another major home price index, the FHFA's Purchase–Only HPI (formerly the OFHEO Purchase–Only HPI) continued to fall in the third quarter, declining 1.8 percent, compared to a 1.4 percent decrease in the second quarter. Over the past year, the FHFA Purchase–Only HPI is down 6.0 percent. The FHFA’s all transactions HPI (not seasonally adjusted)—which includes data from new home sales and refinancings—has fallen 4.0 percent over the past four quarters. Methodological differences between the Case-Shiller and FHFA house price indexes (such as the use/non–use of nonconforming mortgages and sampling different geographical areas), leads to some dissimilarity between the indexes. However, the overall trend is both indexes is roughly the same.
  • 10.16.2008
  • Price Statistics, September 2008
  • Overall, this was a fairly encouraging report. The CPI was virtually unchanged in September, falling just 0.4 percent at an annualized rate, while the core was up only 1.7 percent (a.r.). The longer-term (12-month) trend in the CPI ticked down from 5.4 percent to 4.9 percent in September, while the 12-month percent change in the core CPI remained at 2.5. Turning to the trimmed-mean measures produced by the Federal Reserve Bank of Cleveland, the median CPI rose 2.9 percent in September, while the 16 percent trimmed-mean CPI increased just 1.4 percent. Over the past couple of months, the median CPI has remained stubbornly elevated (falling only slightly), while the 16 percent trimmed-mean CPI has fallen dramatically from July’s 7.2 percent increase. This disparity between the median and the trim has a lot to do with the majority of the index's components falling in the tails of the distribution. In September, for example, only 29 percent of the CPI’s components increased in price between 1 and 4 percent, while 26 percent decreased and 23 percent rose at rates exceeding 5.0 percent.
  • 06.17.2008
  • Producer Price Index
  • The Producer Price Index (PPI) jumped up 17.4 percent (annualized rate) in May, following a meager 2.1 percent increase in April. Energy and food components pushed up the overall PPI, rising 77.7 percent and 10.0 percent, respectively. Over the past 12 months, the PPI has increased 7.2 percent. The PPI excluding food and energy (core PPI) rose 2.9 percent during the month, while its 12-month growth rate remained steady at 3.0 percent. Further back on the production line, both core intermediate and core crude goods production are showing price pressure. Core intermediate goods prices increased 26.4 percent in May, while prices of core crude goods?a more volatile series?spiked up 79.8 percent.
  • 04.25.2008
  • Consumer Sentiment
  • Consumer sentiment, according to April?s final report, was revised down 0.6 point from the preliminary report, slipping 6.9 points from March to an index value of 62.6. The consumer expectations component was revised down slightly, to 53.3, its lowest reading since December 1990. Short-term average inflation expectations jumped up over a full percentage point, from 4.6 in March to 5.7 in April. The movement in longer-term (5-year to 10-year) average inflation expectations was less dramatic, rising 0.3 percentage point to 3.5 percent.
  • 04.16.2008
  • The Consumer Price Index
  • The Consumer Price Index (CPI) rose at an annualized rate of 4.2 percent in March, returning to its elevated trend after a brief respite in February, when it rose only 0.3 percent (annualized rate). The CPI is up 4.6 percent over the past six months. The CPI excluding food and energy (core CPI) increased only 1.8 percent during the month, contrasting the rather sizeable increase in the overall CPI. While energy prices spiked in March (up 25.9 percent), the core CPI was affected by a near 10-year record decrease in apparel prices—14.4 percent—in March. The median and 16 percent trimmed-mean CPI measures, which measure underlying inflation trends, rose 3.1 percent and 3.7 percent, respectively, in March. Over the past 12 months, the median CPI has increased 3.0 percent, while the 16 percent trimmed-mean CPI has risen 2.8 percent.
  • 04.15.2008
  • Producer Price Index
  • The Producer Price Index (PPI) jumped 13.9 percent (annualized rate) in March, following a 4.2 percent increase in February. The index's 12-month growth rate is now at 6.9 percent, its sixth consecutive month above 6 percent. Producer prices for finished goods excluding food and energy (core PPI) rose 3.0 percent during the month and have risen 5.0 percent over the past three months. Further back on the production line, both core intermediate goods prices and crude goods prices were elevated, advancing 14.0 percent and 50.6 percent, respectively.