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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (46257)	4/14/2000 3:18:00 PM
From: Les H	Read Replies (3) \| Respond to of 99985

US BLS: 1Q CPI SERVICES UP AT 4.1% ANNUAL RATE; MOSTLY SHELTER --And Shelter Boosted By Hotel, Vacation Spot Price Hikes --Less Energy, Overall CPI Up 0.3%; Less Energy and Food, Up 0.4% --Core Rate Up 0.4% in March; Runs at 3.2% Annual Rate in 1Q By Denny Gulino WASHINGTON (MktNews) - The long-time trend for CPI's measure of services prices to outpace commodity prices showed a strong acceleration in the first quarter, rising at a 4.1% annual rate compared to 2.7% for all of last year, the Bureau of Labor Statistics reported Friday morning. Overall the Consumer Price Index was up 0.7% in March, swollen by oil price hikes that have since faded. Without counting energy, the index would have been up 0.3%. And without the restraining effect of the month's small 0.1% increase in food prices as well as without energy, the overall index would have been up 0.4%, a BLS analyst said. Commodity prices, docile for many years, rose at just a 0.3% annual rate in the first quarter, excluding energy related services. "Services have been rising more rapidly than commodities for some time," senior BLS analyst Patrick Jackman told Market News International as the CPI report was being made public, "but shelter is a service, and shelter accounts for a hunk of that." In fact, the shelter category alone is 30% of the CPI, and services overall are 58%. Commodities prices account for the other 42%, he said. But medical care, up 0.5% in March and rising at a 4.8% annual rate in the first quarter, "accounts for a lot of that too," he said. "The magnitude of services vis a vis commodities has been something that has been pretty consistent," he continued, "but the acceleration that has occurred here in the first quarter has not been in the area of commodities, but services." Shelter costs alone rose 0.5% in March, and 0.3% in the first two months of the quarter -- though is up just 3.0% in 12 months through March. Within shelter, the BLS said, the "owners' equivalent rent" measure was up 0.3%, the same as the index for rent, while the index of lodging away from home rose 3.2% after dropping 0.3% in February. And prior to seasonal adjustment, the index for lodging away from home rose 5.0% and is up 14.3% in the first quarter. Asked whether the shelter and services acceleration looks like a continuing trend, Jackman replied, "You've got too short a period to really say." Historically over the last five years, he said, commodities excluding food and energy "have been pretty docile, where services have moved at a faster pace. The shelter category "is kind of unique," Jackman said. Excluding energy, he said, the CPI would have been up 0.3%, and without food and energy, the overall index was up 0.4%. Boosted by the 50.5% annual rate climb of energy prices in the first quarter, the overall CPI was up 5.8% at an adjusted annual rate for the first three months of the year. Expectations in a Market News International survey of economists centered on an increase of 0.5% in the overall CPI, and a 0.2% increase in the core rate. Thursday's Producer Price Index came in at twice the half-point expectations, rising 1.0% overall, but only 0.1% for the PPI's core rate.