2012 Economic Calendar
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Consumer Price Index  
Released On 1/19/2012 8:30:00 AM For Dec, 2011
PriorConsensusConsensus RangeActual
CPI - M/M change0.0 %0.1 %-0.1 % to 0.2 %0.0 %
CPI - Y/Y change3.4 %3.0 %
CPI less food & energy- M/M change0.2 %0.1 %0.1 % to 0.2 %0.1 %
CPI less food & energy - Y/Y change2.2 %2.2 %
CPI - level226.720 index level
Core CPI - level226.836 index level

Consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.

By major components, energy dipped 1.3 percent after declining 1.6 percent in November. Gasoline fell 2.0 percent, following a 2.4 percent decline in November. Food price inflation firmed to 0.2 percent after rising 0.1 percent the prior month.

Within the core, upward pressure was seen in medical care, recreation, and rent. Declines were seen in used cars & trucks, new vehicles, and apparel.

Year-on-year, overall CPI inflation posted at 3.0 percent, compared to 3.4 percent in November (seasonally adjusted). The core rate edged held steady at 2.2 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.0 percent in December versus 3.4 percent in November. The core was up 2.2 percent, matching November's rate.

The latest CPI report continues to give the Fed leeway for continued loose monetary policy. Year-ago rates are above the implicit Fed target range for inflation but on the margin, they are coming down as some Fed officials have predicted. Between favorable jobless claims, housing starts & permits, and low inflation, equity futures are moderately positive.

Consensus Outlook
The consumer price index in November was unchanged after declining 0.1 percent in October. Excluding food and energy, the CPI increased 0.2 percent after a 0.1 percent advance in October. By major components, energy fell 1.6 percent after declining 2.0 percent in October. Food price inflation increased 0.1 percent after rising 0.1 percent the prior month. Within the core, the indexes for shelter, medical care, apparel, and personal care all rose. On the down side for November, indexes for new vehicles and for used cars and trucks declined.

The Consumer Price Index is a measure of the change in the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation for the consumer. Annual inflation is also closely watched.

The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group, representing about 87 percent of the population. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.

The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.

The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.  Why Investors Care
It is always a good idea to look at more than a few months of data to get a sense of changes in established trends. Monthly changes in the CPI are mainly volatile because of sharp fluctuations in food and energy prices. The core CPI eliminates the sharper fluctuations.
Data Source: Haver Analytics
Yearly changes tend to smooth out more severe monthly fluctuations and give a better idea of the underlying rate of inflation. Even with the smoother trend, note that the core CPI does not fluctuate as much as the total CPI.
Data Source: Haver Analytics

2012 Release Schedule
Released On: 1/192/173/164/135/156/147/178/159/1410/1611/1512/14
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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