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2009 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 12/15/05 For Nov 2005 | |||||||||||||||||||||||||
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Highlights
The CPI fell a sharp 0.6% in November -- the biggest drop since July 1949 -- but due to a big month-to-month downswing in energy prices. Excluding energy, the CPI rose 0.3% with uncomfortable increases in most categories. The core rate, which excludes both energy and food and is considered a key barometer of underlying inflation pressures, rose an as-expected 0.2% though the unrounded figure pushed 0.3% at 0.248%. The year-on-year rate remained at 2.1%, still on the wrong side of the 2.0% comfort line watched closely by Federal Reserve policy makers.
Energy prices fell 8.0% in the month with most categories showing big declines led by a 16% plunge in gasoline. Electricity prices did rise a record 3.8% in the month but the gain was boosted by a special adjustment. Hurricanes Katrina and Rita registered huge hits to September and October inflation but as November data show they proved to have only a temporary effect. The Labor Department noted that seasonal factors may push gasoline prices down in December's data.
The crux of the report is seen in non-energy categories which for the most part showed steady pressure consistent with solid economic growth: hotels up 1.3%, medical care up 0.6%, housing up 0.5%, education & communication up 0.4%, tobacco up 0.4%, food up 0.3%. Prices of new vehicles were a positive, falling 0.1% in the month with new models making up 55% of the sample. Used car prices fell 0.9% likely reflecting slow demand for SUVs.
Bonds retreated in early reaction to the data, which do confirm Ben Bernanke's warning last month that inflation is running on the hot side. The dollar showed no reaction, while stocks are not likely to get any boost from the data.
The consumer price index increased 0.2 percent in October after posting sizable gains in the three previous months - due primarily to energy price spurts. Excluding food and energy, the CPI rose 0.2 percent for the month. Gasoline prices should dip further in November, but not home heating oil.
CPI Consensus Forecast for Nov 05: -0.4 percent
Range: -0.6 to 0.0 percent
CPI ex food & energy Consensus Forecast for Nov 05: 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. |
| 2005 Release Schedule | ||||||||||||||||||||||||||
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