2018 Economic Calendar
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Consumer Price Index  
Released On 1/12/2018 8:30:00 AM For Dec, 2017
PriorConsensusConsensus RangeActual
CPI - M/M change0.4 %0.1 %0.0 % to 0.3 %0.1 %
CPI - Y/Y change2.2 %2.1 %2.0 % to 2.3 %2.1 %
CPI less food & energy- M/M change0.1 %0.2 %0.1 % to 0.3 %0.3 %
CPI less food & energy - Y/Y change1.7 %1.7 %1.6 % to 1.8 %1.8 %

Highlights
Housing and medical care costs, which together make more than half of the CPI, firmed and fed a constructive 0.3 percent rise in the ex-food and ex-energy core rate for December. This hits the high end of Econoday's estimates as does the 1.8 percent year-on-year rate. This is good news that points to strength for the Fed's core PCE price index later this month.

The housing sector has been showing general strength and is reflected in housing costs which went up a notch with a 0.3 percent December gain and with the closely watched owners' equivalent rent sub-component also up 0.3 percent. Another 0.3 percent gain comes from medical costs which are getting a lift from prescription drugs where hikes are coming on strong, up 1.0 percent following November's 0.6 percent gain.

Energy went into reverse in December, falling 1.2 percent in the month with gasoline down 2.7 percent. Food prices extended their dead flat trend with only a 0.1 percent gain in the month. When including these two components to the core, the total CPI rose a disappointing looking 0.1 percent, in a reading that of course masks the strength in housing and medical care. The yearly rate for the total CPI is down 1 tenth to 2.1 percent.

Pulling down prices once again is apparel, falling 0.5 percent following November's 1.3 percent decline. Discounting here is a likely factor behind the weak 0.3 percent December decline at clothing stores in this morning's retail sales report. Another reading of note is wireless services prices which, after two months of strength, eased back to unchanged.

This report is mixed but the core is definitely going in the right direction. When some of the wage hikes that are being announced at companies like Wal-Mart begin to kick in, the nation's inflation numbers could begin to improve.

Consensus Outlook
Gasoline prices gave a 0.4 percent headline boost to the December CPI which for this key series was an outsized gain. Other prices were flat or weaker including apparel, medical care, and housing. For December, forecasters see the overall CPI rising only 0.1 percent with the less food & energy rate at 0.2 percent. Year-on-year, the consensus gain for the CPI is 2.1 percent with the core at 1.7 percent.

Definition
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
 
[Chart]
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
 
[Chart]
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
 
 

2018 Release Schedule
Released On: 1/122/143/134/115/106/127/128/109/1310/1111/1412/12
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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