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01.09.07
Inflation and Prices
November Price Statistics
by Michael F. Bryan and Brent Meyer
The Consumer Price Index (CPI) rose at an annualized rate of 10.0 percent in November, its largest spike since a post-hurricane Katrina jump of 15.7 percent in September 2005. Year-to-date (January–November 2007), the CPI index has advanced 4.2 percent (at an annualized rate), compared to the 2.6 percent increase for all of 2006. Although this month’s jump in consumer prices was largely due to a 95.5 percent shock in energy prices, the CPI excluding food and energy (core CPI) was elevated, rising 3.3 percent during the month, well above any of its longer-run trends. Both the median and 16 percent trimmed-mean CPI indicators posted their largest increases of the year, advancing 3.7 percent in November.
November Price Statistics
Percent change, last
1mo.a 3mo.a 6mo.a 12mo. 5yr.a 2006 avg.
Consumer Price Index
All items 10.0 5.6 3.1 4.3 3.0 2.6
Less food and energy 3.3 2.6 2.6 2.3 2.1 2.6
Medianb 3.7 3.3 2.8 2.9 2.5 3.1
16% trimmed meanb 3.7 3.4 2.6 2.7 2.3 2.7
Producer Price Index
Finished goods 45.4 18.9 7.2 7.7 4.3 1.6
Less food and energy 4.5 1.7 2.0 1.9 1.6 2.1
a. Annualized.
b. Calculated by the Federal Reserve Bank of Cleveland.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; and Federal Reserve Bank of Cleveland.
Over the last three months, every major component of the CPI (except education and communication), rose at an annualized rate that exceeded 3.0 percent, pushing the 12-month growth rate in the CPI up to 4.3 percent in November, from 2.0 percent in August. The longer-term trends in the core CPI and the trimmed-mean inflation estimators have risen over that period as well (albeit less dramatically), and are ranging between 2.3 percent and 2.9 percent.
November also saw some firming in core goods prices, which rose 2.1 percent during the month, pushing their 12-month growth rate above zero for the first time in nine months. The longer-run trend in core service prices remained planted above 3.0 percent.
Sixty percent of the CPI index’s components increased more than 3 percent in November, compared to a year-to-date average of 49 percent. Price increases were relatively broad-based among components, as only 15 percent of the index showed a deceleration in prices, compared to a 24 percent average for the year so far. As evidenced in the graph below, there is not much of a silver lining in the data this month.
However, looking forward, professional forecasters see CPI inflation falling to near 2 percent by the end of next year. Even the most pessimistic scrooges (the Top 10 Blue Chip average) have the CPI growth rate falling under 3 percent by the end of 2008.
Inflation and Prices
November Price Statistics
by Michael F. Bryan and Brent Meyer
The Consumer Price Index (CPI) rose at an annualized rate of 10.0 percent in November, its largest spike since a post-hurricane Katrina jump of 15.7 percent in September 2005. Year-to-date (January–November 2007), the CPI index has advanced 4.2 percent (at an annualized rate), compared to the 2.6 percent increase for all of 2006. Although this month’s jump in consumer prices was largely due to a 95.5 percent shock in energy prices, the CPI excluding food and energy (core CPI) was elevated, rising 3.3 percent during the month, well above any of its longer-run trends. Both the median and 16 percent trimmed-mean CPI indicators posted their largest increases of the year, advancing 3.7 percent in November.
November Price Statistics
Percent change, last
1mo.a 3mo.a 6mo.a 12mo. 5yr.a 2006 avg.
Consumer Price Index
All items 10.0 5.6 3.1 4.3 3.0 2.6
Less food and energy 3.3 2.6 2.6 2.3 2.1 2.6
Medianb 3.7 3.3 2.8 2.9 2.5 3.1
16% trimmed meanb 3.7 3.4 2.6 2.7 2.3 2.7
Producer Price Index
Finished goods 45.4 18.9 7.2 7.7 4.3 1.6
Less food and energy 4.5 1.7 2.0 1.9 1.6 2.1
a. Annualized.
b. Calculated by the Federal Reserve Bank of Cleveland.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; and Federal Reserve Bank of Cleveland.
Over the last three months, every major component of the CPI (except education and communication), rose at an annualized rate that exceeded 3.0 percent, pushing the 12-month growth rate in the CPI up to 4.3 percent in November, from 2.0 percent in August. The longer-term trends in the core CPI and the trimmed-mean inflation estimators have risen over that period as well (albeit less dramatically), and are ranging between 2.3 percent and 2.9 percent.
November also saw some firming in core goods prices, which rose 2.1 percent during the month, pushing their 12-month growth rate above zero for the first time in nine months. The longer-run trend in core service prices remained planted above 3.0 percent.
Sixty percent of the CPI index’s components increased more than 3 percent in November, compared to a year-to-date average of 49 percent. Price increases were relatively broad-based among components, as only 15 percent of the index showed a deceleration in prices, compared to a 24 percent average for the year so far. As evidenced in the graph below, there is not much of a silver lining in the data this month.
However, looking forward, professional forecasters see CPI inflation falling to near 2 percent by the end of next year. Even the most pessimistic scrooges (the Top 10 Blue Chip average) have the CPI growth rate falling under 3 percent by the end of 2008.
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