Magazine article Economic Trends

October Price Statistics

Magazine article Economic Trends

October Price Statistics

Article excerpt

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The Consumer Price Index (CPI) rose at an annualized rate of 3.6 percent in October--the second straight increase since the index's 1.7 percent drop in August. Year-to-date, the CPI has advanced 3.6 percent (at an annualized rate), which is ahead of 2006's annual increase of 2.5 percent. Growth in the CPI excluding food and energy prices (core CPI) slowed to 1.9 percent, after having climbed to 2.7 percent in September. However, both the median and 16 percent trimmed-mean CPI indicators posted increases above 3 percent in October (3.2 percent and 3.4 percent, respectively), outpacing their 3-, 6-, and 12-month averages.

The 12-month growth rate in the CPI rose from 2.8 percent in September to 3.5 percent in October and has increased 1.5 percentage points over the last two months to the highest it has been since August 2006. The 12-month trends of the core CPI and the 16 percent trimmed-mean CPI inched up during the month, to 2.2 percent and 2.5 percent, respectively. The longer-term trend in the median CPI held steady at 2.8 percent, which is down from a recent high of 3.2 percent in March.

Roughly 53 percent of the CPI's components increased in excess of 3 percent in October, compared to 45 percent over the previous three months. Some interesting and possibly transitory component-price increases led to overall acceleration in the index. Public transportation prices, which increased 3.1 percent in the third quarter, jumped 16 percent in October because of a 23.5 percent spike in airline fares. Hospital and related services, which had been increasing moderately for most of the year, rose 14 percent, the largest increase of this CPI component in five years.

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There were also some unusual price changes in the shelter category. Rent of primary residence, which had been moderating in recent months, posted its largest increase in six years, rising 5. …

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