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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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The Consumer Price Index is a measure of 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. Why Investors Care
| Released on 3/16/07 For Feb 2007 | |||||||||||||||||||||||||
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Highlights
In February, the consumer price index firmed to a 0.4 percent increase, following a 0.2 percent increase in January. February's rise was above the consensus forecast for a 0.3 percent boost in the overall CPI. The core CPI slowed to a 0.2 percent increase in February, following a 0.3 percent rise in January. The core rate matched the market forecast for a 0.2 percent increase.
Year-on-year, the overall CPI is at 2.4 percent, up from to 2.1 percent in January while the core is at 2.7 percent, unchanged from January.
Energy prices pushed up the overall CPI as expected along with further boosts in food prices. In the non-expenditure category for energy, prices jumped 0.9 percent, following a 1.5 percent dip in January. Piped gas and electricity spiked 1.5 percent while fuel oil slipped 0.2 percent and gasoline prices increased 0.3 percent. Energy costs are down 1.0 percent on a year-on-year basis, compared to down 2.9 percent in January.
Food and beverages also provided significant price pressure with a 0.8 percent hike, following a 0.7 percent jump in January. Leading the increase were fruits & vegetables with a 4.7 percent monthly surge. Other components generally showed upward price pressure. Housing was up 0.4 percent in February with the important owners equivalent rent up 0.3 percent, following a 0.2 percent rise in January. Medical insurance slowed but not by a lot with a 0.5 percent increase in February, following a first of the year spike of 0.8 percent. Prescription drug prices typically increase in January and are hard to seasonally adjust.
Today's report was not as scary as yesterday's PPI report. Even though the core CPI came in as expected, there was no progress on the inflation front. The core rate is still well above the Fed's implied target zone of 1 to 2 percent core inflation. Markets may just give a sigh of relief that numbers were not worse. However, there are increasing signs that the economy is in "stagflation lite."
The consumer price index slowed to a 0.2 percent rise in January, following a 0.4 percent jump in December. The moderation was primarily due to weaker oil prices bringing energy inflation down. The core CPI, however, rose 0.3 percent, following a 0.1 percent increase in December. However the unrounded core increase of 0.25565 was not as scary as the rounded figure. The Bureau of Labor Statistics is now releasing unrounded monthly figures for the CPI changes. The big special factor in the firming in the core was the spike in medical expenses - apparently reflecting start-of-the-year increases in prescription prices and various medical services which are difficult to seasonally adjustment. The medical component bears watching for any technical slowing in February from January's jump.
CPI Consensus Forecast for February 07: +0.3 percent
Range: +0.1 to +0.5 percent
CPI ex food & energy Consensus Forecast for February 07: +0.2 percent
Range: +0.1 to +0.3 percent
![[Chart]](chart.gif)
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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. |
![[Chart]](chart_1.gif)
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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. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
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