Friday, November 23, 2012

October CPI: Annual growth in CPI rises for third month

The Bureau of Labor Statistics released last week the October CPI for US urban areas and regions. In the Mountain-Plains region, from October 2011 to October 2012, the CPI increased 2.5 percent, rising from September's year-over-year change of 2.2 percent.

In the first graph, we see that the year-over-year change in October for the Mountain-Plains CPI was down from October 2011's change of 3.3 percent, and was also down from 2008's pre-recession annual change of 3.3 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 2.1 percent. (Front Range-specific price data, however, would likely show greater increases in home prices, given recent increases in rents and home prices in Colorado.)

Apparel prices continued to grow and were up, year over year, by 4.6 percent and transportation prices were up by 4.7 percent, year over year. Medical care prices were up by 3.6 percent.

The Eurozone recently slipped into recession showing ongoing moderation in global demand for a variety of goods. This has helped keep CPI down, although October 2012 was the third month in a row to show a year over year increase in CPI.

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, but has been near 2 percent in recent months.

The CPI change from September 2012 to October 2012 was up 0.4 percent.

Over the past ten years (comparing June 2003 to June 2012), the CPI has risen 24.9 percent. In other words, a dollar today buys about 75 percent of what it did in 2003.