2012 Economic Calendar
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Consumer Price Index  
Released On 7/17/2012 8:30:00 AM For Jun, 2012
PriorConsensusConsensus RangeActual
CPI - M/M change-0.3 %0.0 %-0.4 % to 0.1 %0.0 %
CPI - Y/Y change1.7 %1.7 %
CPI less food & energy- M/M change0.2 %0.2 %0.1 % to 0.2 %0.2 %
CPI less food & energy - Y/Y change2.3 %2.2 %
CPI - level228.527 index level
Core CPI - level229.446 index level

In June, consumer prices were soft on a decline in energy. Meanwhile, the core rate is still stubbornly on the warm side. The consumer price index was unchanged in June after falling 0.3 percent in May. Analysts had forecast no change at the headline level. Excluding food and energy, the CPI rose 0.2 percent, following a 0.2 percent increase in May. Expectations were for a 0.2 percent rise.

By major components, energy declined 1.4 percent after falling a sharp 4.3 percent in May. Gasoline fell 2.0 percent, following a plunge of 6.8 percent the prior month. Food prices in June gained 0.2 percent after no change in May.

Within the core, the shelter index posted its smallest increase since September, the index for used cars and trucks was unchanged after a series of increases, and the index for airline fares declined. However, the index for medical care posted its largest increase since 2010 and the indexes for apparel and recreation both rose substantially in June.

Year-on-year, overall CPI inflation held steady at 1.7 percent in June (seasonally adjusted). The core rate nudged down to 2.2 percent from at 2.3 in May percent on a year-ago basis. On an unadjusted year-ago basis, the overall figure was up 1.7 percent in June, matching the 1.7 percent in May. The core was up 2.2 percent, compared to 2.3 percent in May, not seasonally adjusted.

Today's inflation report is good news for the consumer wallet-spending power was not eroded by inflation. But it likely did not change Fed officials' varying views on the risk of higher inflation. The doves will point to headline numbers while the hawks will see little progress on the core rate and with upward pressure showing up in food price inflation.

Consensus Outlook
The consumer price index fell 0.3 percent in May, following no change the month before. Excluding food and energy, the CPI gained 0.2 percent, compared to 0.2 percent in April. By major components, energy dropped a monthly 4.3 percent after falling 1.7 percent the prior month. Gasoline declined a sharp 6.8 percent, following a drop of 2.6 percent in April. Food prices were unchanged in May, following a 0.2 percent gain in April. Within the core, the indexes contributing to the increase were largely the same ones as in April: shelter, medical care, used cars and trucks, apparel, airline fares, and new vehicles. The indexes for household furnishings and operations and for tobacco 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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