CPI: Core Edges Up Again, Led By Shelter
December 11, 2019
Bottom Line: Core consumer price inflation rose 0.23% in November as used card prices, medical care, and cell phone prices inched higher while alcohol and airfare prices fell slightly. Owner's Equivalent Rent, a key measure of the price of shelter, was up 0.24% but has decelerated after some volatility, up 2.7% annualized over the last three months versus 2.8% and 3.3% over the last six months and 12 months, respectively. Overall, core inflation remains muted and is turning modestly slower again after a period of modest upward pressure. The CPI ROSE by 0.26% in November, compared with market expectations for an increase of 0.20%.
- Food prices increased by 0.12% while energy prices rose by 0.8%.
- Prices for gasoline rose by 1.1% while prices for fuel oil increased by 0.8%, prices for electricity climbed by 0.3%, and prices for natural gas rose by 1.1%.
- Energy prices are now 0.6% BELOW their year ago level.
- Prices for commodities excluding food and energy commodities were flat.
- Gains in tobacco (+0.8%), used cars & trucks (+0.6%), were offset by declines in alcoholic beverages (-0.3%), new vehicles (-0.1%).
- Prices for services excluding energy services rose 0.3% with moderate increase in medical care services (+0.4%), shelter (+0.3%), and owner's equivalent rent (+0.2%).
- Core consumer prices are now 2.3% ABOVE their year ago level; in November 2018, consumer prices were also 2.3% ABOVE their year ago level.
Article by Contingent Macro Advisors