| Consumer Price Index |
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Released On 12/16/2011 8:30:00 AM For Nov, 2011
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Prior | Consensus | Consensus Range | Actual |
| CPI - M/M change | -0.1 % | 0.1 % | -0.1 % to 0.2 % | 0.0 % | | CPI - Y/Y change | 3.6 % | | | 3.4 % | | CPI less food & energy | 0.1 % | 0.1 % | 0.0 % to 0.2 % | 0.2 % | | CPI less food & energy - Y/Y change | 2.1 % | | | 2.2 % |
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Highlights
It looks like the Fed is getting its wish for easing inflation with lower energy costs coming into play-at least for now. The consumer price index in November was unchanged after declining 0.1 percent in October. November's number posted below market expectations for a 0.1 percent rise. Excluding food and energy, the CPI increased 0.2 percent after a 0.1 percent advance in October. Analysts projected a 0.1 percent rise.
By major components, energy fell 1.6 percent after declining 2.0 percent in October. Gasoline fell 2.4 percent, following a 3.1 percent drop in October. Food price inflation increased 0.1 percent after rising 0.1 percent the prior month.
Within the core, the indexes for shelter, medical care, apparel, and personal care all rose. Upward pressure primarily came from a 0.6 percent jump in apparel prices, following a 0.4 percent increase in October. Apparel price inflation is somewhat volatile due to less predictable discounting by merchants. Indexes for new vehicles and for used cars and trucks declined 0.3 percent and 0.1 percent, respectively.
Year-on-year, overall CPI inflation decelerated to 3.4 percent from 3.6 percent in October (seasonally adjusted). The core rate firmed to 2.2 percent from 2.1 percent the month before on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.4 percent in November versus 3.5 percent in October. The core was up 2.2 percent compared to 2.1 percent the prior month.
Despite the firming in the core rate, the overall picture for consumer price inflation is favorable for the Fed to continue to expect within or below target inflation in coming quarters. Equity futures were little changed on the release.
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Market Consensus before announcement
The consumer price index in October declined 0.1 percent, following a 0.3 percent boost in September. Excluding food and energy, the CPI rose a modest 0.1 percent, matching September's gain. By major components, energy declined 2.0 percent, following a jump of 2.0 percent in September. Food price inflation softened to a 0.1 percent rise after jumping 0.4 percent. Within the core, upward pressure was seen in medical care and apparel with declines in new vehicles and used cars partially offsetting.
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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. That is the index shows the change in price levels since the index base period, currently 1982-84 = 100. Monthly changes in the CPI represent the rate of inflation.
Why Investors Care
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![[Chart]](showimage.asp?imageid=21805)
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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.
Data Source: Haver Analytics
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![[Chart]](showimage.asp?imageid=21806)
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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.
Data Source: Haver Analytics
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