May CPI
Updated 17-Jun-09 09:02 ET
Highlights
- The May CPI report didn't bring any major surprises. Total CPI was up 0.1% and core CPI was up 0.1%. Consensus estimates called for increases of 0.3% and 0.1%, respectively.
- The softer-than-forecast number for total CPI wasn't regarded as much of a surprise because the softer-than-expected PPI number primed the market to think it could see a "soft" CPI number.
- A 0.8% gain in the transportation index, a 0.3% gain in the medical care index, and a 0.2% increase in the energy index were the drivers behind the CPI increase, which was tempered by a -0.2% decline in the food and beverages index, a -0.2% decline in the apparel index, and a -0.1% decline in the housing index.
Key Factors
- On a year-over-year basis, total CPI is now down -1.3% while core CPI is up 1.8%. In this regard, the report can be thought of as being mixed
- The year-over-year core number should be pleasing to the Fed as it is within the Fed's inflation comfort zone and also doesn't provide fuel for the deflation argument.
Big Picture
- Inflation trends have weakened. The decline in energy prices after the summer spike has taken CPI down to -1.3% on a year-over-year basis as of May 2009 data. Energy prices have again increased, yet the core rate should ease from due to weak demand. Low inflation rates are likely to continue through 2009 although deflation is not likely.
| Category |
MAY |
APR |
MAR |
FEB |
JAN |
| All Items |
0.1% |
0.0% |
-0.1% |
0.4% |
0.3% |
| Food and Beverages |
-0.2% |
-0.2% |
-0.1% |
-0.1% |
0.1% |
| Housing |
-0.1% |
-0.1% |
-0.1% |
0.0% |
0.0% |
| Equivalent Rent |
0.1% |
0.1% |
0.2% |
0.1% |
0.3% |
| Apparel |
-0.2% |
-0.2% |
-0.2% |
1.3% |
0.3% |
| Transportation |
0.8% |
-0.4% |
-1.1% |
1.9% |
1.3% |
| Vehicles |
0.5% |
0.4% |
0.0% |
0.5% |
0.2% |
| Motor Fuel |
2.7% |
-2.8% |
-4.0% |
8.3% |
6.0% |
| Medical Care |
0.3% |
0.4% |
0.2% |
0.3% |
0.4% |
| Educ and Commun |
0.2% |
0.3% |
0.2% |
0.2% |
0.3% |
| Special Indices |
|
|
|
|
|
| Core |
0.1% |
0.3% |
0.2% |
0.2% |
0.2% |
| Energy |
0.2% |
-2.4% |
-3.0% |
3.3% |
1.7% |
| Services |
0.0% |
0.0% |
0.0% |
0.1% |
0.1% |
