Friday, July 16, 2010

Consumer Price Index

Released on 7/16/2010 8:30:00 AM For Jun, 2010

PriorConsensusConsensus RangeActual
CPI - M/M change-0.2 %-0.1 %-0.2 % to 0.0 %-0.1 %
CPI less food & energy0.1 %0.1 %0.0 % to 0.1 %0.2 %
Lower energy costs tugged down on the consumer price index in June, resulting in a third consecutive decline in the headline number. In June overall CPI inflation dipped 0.1 percent, following a 0.2 percent decline in May. The latest month matched the market projection for a 0.1. Excluding food and energy, the CPI edged up to 0.2 percent after a 0.1 percent uptick in May. This was higher than analysts' forecast for a 0.1 percent rise.

Detail to follow shortly. Please check back.
Market Consensus Before Announcement
The consumer price index has been negative two months in a row-thanks to energy declines. In May, overall CPI inflation declined 0.2 percent, following a 0.1 percent dip in April. Excluding food and energy, CPI inflation rose 0.1 percent, following no change in both March and April. Helping to keep the core rate soft was no change in the owners' equivalent rent subcomponents. This series has either been flat or negative for several months. Looking ahead, seasonally soft gasoline prices should kept the headline number on its recent downtrend.
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
[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

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