CPI Rises on Surging Gasoline Prices


The Bureau of Labor Statistics reported the Consumer Price Index for All Urban Consumers (CPI-U) jumped 0.6 percent on a month-to-month basis in August 2012. This ended a four-month streak in which the CPI-U was either unchanged or declined, plus it also marked the largest percentage change in overall consumer price levels since mid-2009. Energy prices accounted for the bulk of last month’s increase in CPI as the energy index surged 5.6 percent from July 2012. The index for gasoline climbed 9 percent on a month-to-month basis, with the EIA indicating that the national average retail price of all grades rose from $3.50 to $3.78 per gallon. Energy prices could bolster the reading for the September CPI report as gasoline and diesel fuel prices continued to increase during the first half of this month.

Core CPI, a measure that excludes volatile food and energy prices, increased approximately 0.1 percent compared to July 2012. Despite seeing sequential gains in the past 31 months, core CPI still points to a very tame rate of inflation in non-food and non-energy goods prices. Indeed, year-over-year rate of growth during August 2012 was 1.9 percent, representing the slowest rate of core CPI growth since mid-2011.

The shelter index, which serves as an approximation for housing costs, increased for the 28th month in a row; however, just as in all the previous months, these gains have been modest at best and the shelter index has increased 2.1 percent on a year-over-year basis. In terms of rental housing costs, NAHB constructs a real rent index using the CPI for rent of primary residences and the topline CPI. According to this measure, real rents declined 0.4 percent in August 2012, representing the largest decline in more than a year. Last month’s decline in the real rent index is a direct result of surging energy prices causing overall CPI to increase at a much faster rate than rents, which have risen at a fairly modest pace for quite some time.

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  1. Eye on the Economy: NAHB Surveys Point to Growing Optimism for Housing « Eye on Housing

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