Wednesday, July 18, 2007

CPI Up .2%

From the BLS:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in June, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The June level of 208.352 (1982-84=100) was 2.7 percent higher than in June 2006.

There are a couple of interesting points in this report.

1.) For those of you who consume food and energy, those prices are up Y/Y on an unadjusted basis of 4.1% and 4.6%, respectively.

As CBS Marketwatch noted:

Energy prices fell 0.5% in June after surging the previous three months at an annual rate of more than 70%. In June, gasoline prices fell 1.1% and natural gas prices fell 0.1%.

Gasoline prices have inched higher in recent weeks, however.

Food prices continued to climb, rising 0.5% in the month. Dairy prices rose 3.2%, and poultry prices rose 2.1%, on higher prices for corn as a feed for poultry and livestock. Fresh fruit and vegetable prices fell.

Food prices are up at an annual rate of 5.1% in the past three months, driven higher by adverse weather, strong global demand and the diversion of much of the corn crop and the nation's arable land into the production of ethanol for fuel.

2.) From the BLS report:

Consumer prices increased at a seasonally adjusted annual rate (SAAR) of 5.2 percent in the second quarter after advancing at a 4.7 percent rate in the first three months of 2007. This brings the year-to-date annual rate to 5.0 percent and compares with an increase of 2.5 percent in all of 2006.

Those are not happy numbers for the Fed.

3.) The unadjusted 12-month core rate of change is 2.2% which is still above the Fed's comfort zone of 1% to 2%.