Anthony L. Karydakis, Director, Senior Analyst at BankOne:
"The CPI rose 0.3% in October, pushing the year-on-year increase of
the index to 2.0% from 1.5%. The core index was up 0.2%,
sustaining its year-on-year gain of 2.2%. The reason for the
somewhat outsized increase in the overall CPI was a 1.9% surge in
energy prices, which was largely due to a 3.8% rise in gasoline
prices. Used cars and trucks declined by 1.6%, while new vehicle
prices rose by 0.4%. A 3.1% decline in tobacco prices helped drag
the “other” category in the CPI down by 0.5%. Medical care costs
rose by a robust 0.6%, but this is not totally out of line for a
component that has been routinely running at a pace double that of
overall inflation. All in all, there is nothing to worry about in the CPI
data that would challenge the premise that inflation is most
definitely not an issue in this environment."
. US: October prices data do not sound like deflation (BNP Paribas)
Last week and today's reports from the Bureau of Labour statistics showed that
in October the development in prices was far from sounding like deflation.
While import prices remained soft, rising by 0.1% and actually declining by
0.1% when petroleum products are excluded, producer prices jumped, rising by
1.1% in October. Energy prices were a big contributor to this acceleration, but
not the only one. Excluding energy, producer prices were up by 0.5%, the
highest rate since January 2001. Consumer prices were up by 0.3%, with only
the third of that rate coming from energy. The core index, that excludes food
and energy, was up by 0.2%.
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