2017 Economic Calendar
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Released On 5/12/2017 8:30:00 AM For Apr, 2017
PriorConsensusConsensus RangeActual
CPI - M/M change-0.3 %0.2 %-0.1 % to 0.3 %0.2 %
CPI - Y/Y change2.4 %2.3 %2.2 % to 2.5 %2.2 %
CPI less food & energy- M/M change-0.1 %0.2 %0.1 % to 0.3 %0.1 %
CPI less food & energy - Y/Y change2.0 %2.0 %2.0 % to 2.2 %1.9 %

Strength in Wednesday's import & export price report and Thursday's producer price report proved to be head fakes as consumer prices failed to show much traction in April, rising an as-expected 0.2 percent at the headline level and managing only a 0.1 percent gain less food & energy which misses Econoday's consensus by 1 tenth. Year-on-year rates are not impressive, at 2.2 percent overall which is down 2 tenths from March with the core down 1 tenth from March at 1.9 percent.

Softness in the details is striking including continued price weakness in medical care, down 0.2 percent in the month, and continuing contraction for communications where providers are in a price war. Apparel is down for a second month with transportation showing only a fractional gain after two prior months of contraction. Owners' equivalents rent, which is closely watched in gauging the housing sector, rose only 0.2 percent.

This report is not only bad news for policy makers who are trying to reflate the economy but also businesses which are paying higher costs for inputs but apparently not getting much price recovery on the selling side. Lack of consumer price pressure will not turn up the heat on the Federal Reserve to raise rates though a hike, at least for now and despite this report, is the expectation for the June meeting.

Consensus Outlook
Consumer prices fell unexpectedly in March both at the headline and core levels as gasoline prices came down as did cellphone plans amid a provider price war. Forecasters are calling for an April rebound with the headline consensus at a 0.2 percent gain on the month for, however, a 2.3 percent year-on-year rate that would be down slightly from March. Less food & energy, the index is seen rising 0.2 percent with this yearly rate unchanged at 2.0 percent. A rebound in this report would help boost confidence that inflation, despite lack of wage traction, is still stable and near the Federal Reserve's 2 percent target zone.

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

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