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