Keeping you up to date on the latest data releases.
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.