CPI Comes At 0.5%, Ex-Food And Energy 0.1%, Below Expectations, QE3 Door Still Open

Tyler Durden's picture

And again we learn from the Department of Truth that core inflation is non-existent. Of course, this number is not applicable to anyone who actually has to buy things. According to the BLS CPI came in line with expectations, and unchanged from last month, at 0.5%. CPI ex food and energy of 0.1% actually declined from last month's 0.2%, and was below consensus of 0.2%. From the release: "The Consumer Price Index for All Urban Consumers (CPI-U) increased  0.5 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.  Gasoline and food prices continued to rise and together accounted for  almost three quarters of the seasonally adjusted all items increase in March. The gasoline index posted its ninth consecutive increase and has now risen 14.4 percent over the last three months. The household energy index rose as well, with advances in the fuel oil and electricity indexes more than offsetting a decline in the index for natural gas. The food at home index continued to accelerate in March, rising 1.1 percent as all six major grocery store food groups increased." What this means is that core CPI will likely not get high enough to derail the option for QE3 if and when it comes around some time in Q3.

 

Still the trend is rather obvious:

Focusing on food and energy:

Food

The food index rose 0.8 percent in March after rising 0.6 percent in February. The food at home index increased 1.1 percent in March and has risen 2.7 percent over the past three months. All six major grocery store food groups increased in March, with increases ranging from 0.5 percent for cereals and bakery products to 1.9 percent for fruits and vegetables. Within the fruits and vegetables component, the fresh vegetables index rose 4.7 percent in March after a 6.7 percent increase in February, as indexes for potatoes, lettuce, and tomatoes all posted significant increases. The index for dairy and related products increased 1.3 percent, while the index for meats, poultry, fish, and eggs rose 1.1 percent. The index for nonalcoholic beverages increased 0.8 percent as the coffee index climbed 3.5 percent. Over the past 12 months, the index for food at home has risen 3.6 percent with the index for meats, poultry, fish and eggs up 7.9 percent. The index for food away from home increased 0.3 percent in March, its largest increase since September, and has risen 1.9 percent over the past 12 months.

Energy

The energy index rose 3.5 percent in March after increasing 3.4 percent in February. It has increased for nine months in a row, rising 23.7 percent since June 2010. The gasoline index rose 5.6 percent in March after a 4.7 percent increase in February. (Before seasonal adjustment, gasoline prices rose 11.7 percent in March.) The index for household energy advanced 0.6 percent in March after a 1.3 percent increase in February. The fuel oil index rose 6.2 percent and has increased 37.2 percent in the last six months. The index for electricity increased 0.7 percent in March, while the index for natural gas declined 1.4 percent. The household energy index has risen 1.2 percent over the last 12 months, with the fuel oil index up 34.0 percent and the electricity index up 1.0 percent but the index for natural gas down 5.5 percent.