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Brent Meyer |

Economist

Brent Meyer

Brent Meyer is a former economist of the Federal Reserve Bank of Cleveland.

05.21.08

Economic Trends

April Price Statistics

Michael F. Bryan and Brent Meyer

The Consumer Price Index (CPI) rose at an annualized rate of 2.5 percent in April, following a 4.2 percent increase in March. The CPI was pushed up by an 11.9 percent jump in food prices that was tempered by a curious 20.8 percent fall in motor fuel prices and a 20.1 percent decrease in the price of lodging away from home. Over the past six months, the CPI has risen 4.5 percent (annualized rate). Consumer prices excluding food and energy increased slightly in April, rising only 1.3 percent after an increase of 1.8 percent in March. In contrast to the rather well-behaved headline and core price indexes, the median and 16 percent trimmed-mean CPI measures rose 2.9 percent and 2.7 percent, respectively.

April Price Statistics

    Percent change, last
    1mo.a 3mo.a 6mo.a 12mo. 5yr.a 2007 avg.
Consumer Price Index
  All items
2.5
2.3
4.5
3.9
3.2
4.2
  Less food and energy
1.3
1.2
2.2
2.3
2.2
2.4
  Medianb
2.9
2.4
3.1
3.1
2.7
3.1
  16% trimmed meanb
2.7
2.5
3.0
2.8
2.5
2.8
Import Price Index
  All commodities
23.9
21.3
20.4
15.4
7.2
11.5
  Nonpetroleum imports
3.0
5.0
3.6
2.8
1.9
2.1
Export Price Index
  All commodities
4.0
11.8
11.4
7.7
4.5
6.1

a. Annualized.
b. Calculated by the Federal Reserve Bank of Cleveland.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; and Federal Reserve Bank of Cleveland.

Digging deeper into the components that comprise the CPI, we can see that nearly 50 percent of the market basket rose at rates exceeding 3.0 percent in April, down slightly from 55 percent last month, but in line with price changes over the past 12 months. Also, 28 percent of the CPI components posted a decrease in price during the month, compared to 16 percent in March and an average of 20 percent over the past 12 months.

Longer-term trends in both headline and core CPI have been falling since the first of the year, but remain elevated. The 12-month growth rate in the CPI fell from 4.3 percent in January to 3.9 percent in April, while the core CPI ticked down 0.2 percentage point to 2.3 percent. However, the longer-term trends in both of the trimmed-mean measures have lingered near their January values.

Import prices continued to surge ahead in April, rising 23.9 percent (annualized rate), following an upwardly revised 40.9 percent jump in March. Over the past three months, import prices are up 21.3 percent. Petroleum import prices are continuing to soar—up 66.9 percent in April and 187.9 percent in March—though the rise in import prices appears to be relatively broad-based. Nonpetroleum imports rose 13.7 percent, a month after posting their largest increase on record (13.9 percent). Nonpetroleum import prices have shot up 6.2 percent over the past 12 months. Export prices increased 4.0 percent in April, following double-digit monthly gains over the past three months, and are up 7.7 percent over April of last year.

Looking forward, the Blue Chip Consensus forecast has consumer prices falling to 2.4 percent by the end of 2009, although these projections were made before the April price reports. Thirty of the fifty forecasters surveyed revised their 2008 inflation forecasts upward in May from last month, as commodity and energy prices continued to rise.