Wednesday, August 15, 2012

July CPI: Consumer price increases slow in Mountain-Plains region

The Bureau of Labor Statistics released Today the July CPI for US urban areas and regions. In the Mountain-Plains region, from July 2011 to July 2012, the CPI increased 1.8 percent, falling from June's year-over-year change of 2.0 percent.  

In the first graph, we see that the year-over-year change in July for the Mountain-Plains CPI was down from July 2011's change of 2.9 percent, and was well down from 2008's pre-recession annual change of 5.3 percent.

In the Mountain-Plains region, housing costs, which are a major portion of the CPI, continue to help keep increases in the CPI down. Housing overall was up year over year by 1.9 percent. 

Apparel prices continued to grow and were up, year over year, by 3.9 percent although transportation prices were up by only 0.5 percent, reflecting falling gasoline prices in recent months. Medical care prices were up by 3.6 percent.

The general slowing of CPI growth reflects ongoing moderation in consumer spending and modest economic growth. The resulting lack of solid growth in consumer spending has had a diminishing effect on CPI. Global demand is also slowing as Eurozone growth continues to slow.

The second graph shows year-over-year changes in Mountain-Plains CPI for all months since 2002. Annual CPI growth hovered around 3 percent for much of 2011.  The year-over-year change fell for much of 2012, but ticked back up again in June.Growth is now at the lowest levels seen since early 2011.

The CPI change from June 2012 to July 2012 was down 0.3 percent.

Over the past ten years (comparing June 2003 to June 2012), the CPI has risen 23.7 percent. In other words, a dollar today buys less than 80 percent of what it did in 2003.