2009 Economic Calendar
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Consumer Price Index  
Released On 6/17/2009 8:30:00 AM For May, 2009
PriorConsensusConsensus RangeActual
CPI - M/M change0.0 %0.3 %0.1 % to 0.4 %0.1 %
CPI - Y/Y change-0.6 %
CPI less food & energy- M/M change0.3 %0.1 %0.1 % to 0.2 %0.1 %
CPI less food & energy - Y/Y change1.9 %

In May, consumer price inflation was tame despite higher energy costs. The headline CPI edged up to a 0.1 percent increase, following no change in April. A 0.2 percent decline in food prices helped to offset a 0.2 percent gain in energy costs for May. The latest numbers came in lower than the market forecast for a 0.3 percent boost. Meanwhile, core CPI inflation eased to a 0.1 percent rise in May, after jumping 0.3 the prior month. The consensus had expected a 0.1 percent rise for the core. Within the core, components were mixed. The indexes for shelter, new and used motor vehicles, and medical care posted increases, while the public transportation index fell 1.0 percent and the indexes for apparel and tobacco declined slightly.

Energy rebounded 0.2 percent in May after a 2.4 percent fall the month before. The boost in energy costs was due to a 3.1 percent gain in gasoline prices after a 2.8 percent drop in April. Heating oil declined 1.8 percent while piped gas and electricity fell 3.1 percent.

On a year-ago basis, headline inflation eased to down 1.0 percent (seasonally adjusted) in May from down 0.6 percent in April. Meanwhile, the core rate slipped to up 1.8 percent from up 1.9 percent the prior month. On an unadjusted year-ago basis, the headline number was down 1.3 percent in May while the core was up 1.8 percent.

Today's CPI report is good news for the Fed and the bond markets. Energy costs are up but not as much as feared and the core is rising at a modest pace. While the bond market will like the report, equities are focusing on company news with FedEx reporting negative news and weighing on equities.

Consensus Outlook
The consumer price index for April came in flat, following a 0.1 percent decline in March. A 2.4 percent drop in energy costs kept the overall CPI weak. Meanwhile, core CPI inflation posted a 0.3 percent jump in April, after rising 0.2 percent the month before. But according to the Labor Department, over 40 percent of the gain in the core rate was due to a second consecutive hike in tobacco taxes. Looking ahead, rising energy costs will likely boost the headline number for May but if the tobacco tax increase in April is not repeated in May, the core should soften-especially as many retailers continue to discount.

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. Monthly changes in the CPI represent the rate of inflation for the consumer. Annual inflation is also closely watched.

The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group, representing about 87 percent of the population. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.

The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.

The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.  Why Investors Care
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
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

2009 Release Schedule
Released On: 1/162/203/184/155/156/177/158/149/1610/1511/1812/16
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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