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| March Consumer Price Results (#1) - Apr. 19, 2006 |
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Summary
Earlier this morning, the Labor Department reported that the Consumer Price Index rose 0.4% during March, versus February's reported increase of 0.1%.
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* The Labor Department reported this morning that the Consumer Price Index rose 0.4% during March, which compared with a 0.1% increase in February.
* March's increase was led by a 1.3% rise in energy prices. Costs in this sector were reported to have declined 1.2% in February. Considering what has taken place recently with energy prices, one would think there is a meaningful rise yet to show up from this sector in the April CPI. On the other hand, the Bureau of Labor Statistics has shown great mathematical "creativity" in recent years in keeping real-world developments from becoming statistical ones.
* Also contributing to the CPI's March increase was a 1.0% rise in apparel prices. This reversed a 1.0% decline in this area in February.
* According to this morning's report, food prices rose a modest 0.1% in March, the same increase reported for February.
* Excluding food and energy, the so-called "core" rate, a convention that is tantamount to absurd, in my opinion, the CPI was up 0.3% during March. This compared with a rise of 0.1% in February.
* The consensus estimates for the overall as well as core results were around 0.4% and 0.2%, respectively.
* For the 12 months ended March 2006, the overall CPI stood 3.4% higher than a year earlier. During the 12 months ended March 2005, this figure was +3.2%.
* The 12-month change in the CPI's core rate as of March 2006 was 2.1%, which compared with a 2.4% gain for the 12 months ended March 2005. As usual, it is the core the comparison that will be all the rage today on CNBC and on other such "be happy, don't worry" venues.
Today's CPI release is the third and last of the government inflation series we follow closely each month (import prices, PPI and CPI), I will soon publish a more detailed statistical analysis of all three measures. I also will update the "Inflation Watch" graph on the home page of the GRA website.
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