Consumer Prices in U.S. Probably Climbed on Jump in Fuel, Food
Consumer Prices in U.S. Rise on Food, Fuel
Daniel Acker/Bloomberg
The cost of living in the U.S. rose in March for a ninth consecutive month, led by increases in food and fuel costs that have yet to filter down to other goods and services.
The cost of living in the U.S. rose in March for a ninth consecutive month, led by increases in food and fuel costs that have yet to filter down to other goods and services. Photographer: Daniel Acker/Bloomberg
The cost of living in the U.S. probably rose in March for a ninth consecutive month, led by increasing costs for food and fuel, economists said before a report today.
The consumer-price index climbed 0.5 percent for a second month, capping the biggest back-to-back gains since 2008, according to the median estimate of economists surveyed by Bloomberg News. Other reports may show manufacturing continued to drive the economic recovery, and consumer sentiment improved.
The inflation figures are projected to show prices of goods and services other than food and fuel are also creeping up as retailers like Jos. A. Bank Clothiers Inc. try to recoup rising expenses. Nonetheless, unemployment at 8.8 percent and stagnant wages mean companies will find it difficult to keep charging more without quashing consumer demand and slowing the recovery.
“Higher commodity costs will partly feed through” to other prices, said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. At the same time, “slack capacity makes it very hard to make price increases stick.”
The Labor Department’s report on consumer prices is due at 8:30 a.m. in Washington. The forecast gain was based on the median of 81 economists surveyed. Estimates ranged from gains of 0.3 percent to 0.9 percent.
Excluding Food, Fuel
Excluding volatile food and fuel costs, so-called core prices may have advanced 0.2 percent in March for a third month, according to the survey median. That would put the increase over the past 12 months at 1.2 percent. As recently as October, the year-over-year gain had slowed to 0.6 percent, the smallest since records began in 1958.
Rising prices have prompted economists surveyed by Bloomberg to lower their forecasts for inflation-adjusted consumer spending. Purchases increased at a 2 percent annual rate in the first quarter after a 4 percent gain in the last three months of 2010, the survey showed.
Food and energy have climbed, reflecting increasing demand for commodities from emerging economies like China. The cost of a gallon of regular gasoline at the pump averaged $3.54 in March, up from $3.18 the prior month, according to data from AAA, the nation’s largest motoring group.
“We are now seeing significant cost-price inflation, which will manifest itself late in 2011, particularly in raw materials such as cotton and wool,” R. Neal Black, chief executive officer of Jos. A. Bank Clothiers said in a March 31 teleconference. “The result will be selected retail price ticket increases throughout 2011, testing the customer’s capacity to absorb small increases.”
Fed Plans
The Federal Reserve last month reiterated a plan to complete a second round of bond purchases that’ll pump $600 billion into the financial system by June.
The Group of 24, which groups countries from Africa, Asia and Latin America, yesterday said “overly expansionary” monetary policy in advanced economies was fueling inflation in emerging economies. The group was meeting on the sidelines of a G-20 meeting in Washington.
A drop in the value of the U.S. currency may also be pushing prices up. The dollar has fallen 10 percent against a trade-weighted basket of currencies since it reached a one-year high in June. A weaker dollar makes imports more expensive.
Import prices rose 2.7 percent last month, the most since June 2009, led by the biggest jump in food costs since 1994, the Labor Department said April 12.
Differing Views
The pickup in inflation has exposed a rift among policy makers. Fed Chairman Ben S. Bernanke, Vice Chairman Janet Yellen and Federal Reserve Bank of New York President William C. Dudley are among those who’ve said the jump in prices will probably be temporary because the economic expansion is still too fragile.
That’s put them at odds with Charles Plosser, president of the Federal Reserve Bank of Philadelphia, and Richard Fisher, his counterpart at the Federal Reserve Bank of Dallas, who have said the central bank should consider removing monetary stimulus this year before inflation flares.
Fed reports today may show manufacturing continued to lead the recovery. Industrial production rose 0.6 percent in March, the most in three months, data due at 9:15 a.m. may show, according to the median forecast of economists surveyed.
The Federal Reserve Bank of New York’s regional factory index at 8:30 a.m. was little changed at 17 this month after 17.5 in March. A reading greater than zero signals growth.
Also today, the Thomson Reuters/University of Michigan preliminary consumer sentiment index increased to 69 for this month from 67.5 at the end of March, according to economists’ forecasts before the release at 9:55 a.m.
The CPI is the broadest of three monthly price gauges from the Labor Department, because it includes goods and services. Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.
Data from the Labor Department yesterday showed March producer prices climbed 0.7 percent.
The Standard & Poor’s 500 has risen 4.5 percent in 2011 through yesterday, extending last year’s 13 percent gain, amid government stimulus measures and higher-than-estimated corporate profits.
Bloomberg Survey
==============================================================
CPI Core Ind. U of Mich
CPI Prod. Conf.
MOM% MOM% MOM% Index
==============================================================
Date of Release 04/15 04/15 04/15 04/15
Observation Period March March March April P
--------------------------------------------------------------
Median 0.5% 0.2% 0.6% 69.0
Average 0.5% 0.2% 0.6% 68.3
High Forecast 0.9% 0.3% 1.0% 72.0
Low Forecast 0.3% 0.1% 0.2% 62.0
Number of Participants 81 78 81 65
Previous 0.5% 0.2% 0.0% 67.5
--------------------------------------------------------------
4CAST Ltd. 0.5% 0.2% 0.5% 70.5
ABN Amro 0.6% 0.2% 0.6% 69.0
Action Economics 0.5% 0.2% 0.5% 65.0
Aletti Gestielle 0.5% 0.2% 0.5% 68.5
Ameriprise Financial 0.4% 0.2% 0.7% 68.0
Banesto --- --- 0.6% 70.0
Bank of Tokyo- Mitsubishi 0.5% 0.3% 0.5% 65.8
Bantleon Bank AG 0.5% 0.2% 0.6% 68.0
Barclays Capital 0.4% 0.1% 0.7% 68.5
Bayerische Landesbank 0.5% 0.1% 0.7% 69.0
BBVA 0.5% 0.2% 0.7% 66.0
BMO Capital Markets 0.5% 0.1% 0.7% 69.0
BNP Paribas 0.5% 0.2% 0.6% 71.0
BofA Merrill Lynch 0.4% 0.2% 0.5% 69.0
Briefing.com 0.5% 0.1% 0.3% 66.0
Capital Economics 0.5% 0.2% 0.8% 65.0
CIBC World Markets 0.4% 0.1% 0.6% ---Citi
0.5% 0.2% 0.4% 68.0
Commerzbank AG 0.5% 0.2% 0.4% 70.0
Credit Agricole CIB 0.5% 0.2% 0.4% ---
Credit Suisse 0.3% 0.1% 0.4% 69.0
Daiwa Securities America 0.4% 0.2% 0.6% 70.0
Danske Bank 0.3% 0.1% 0.5% 67.5
DekaBank 0.5% 0.2% 0.6% 70.0
Desjardins Group 0.4% 0.1% 0.6% 67.5
Deutsche Bank Securities 0.4% 0.2% 0.4% 70.0
Deutsche Postbank AG 0.4% 0.2% 0.7% 68.0
DZ Bank 0.4% 0.2% 0.5% 71.0
Fact & Opinion Economics 0.9% 0.3% 0.7% 71.0
First Trust Advisors 0.5% 0.1% 0.9% 70.0
FTN Financial 0.5% 0.2% 0.4% 62.0
Goldman Sachs 0.5% 0.2% 0.7% ---
Helaba 0.6% 0.2% 0.7% 67.0
High Frequency Economics 0.5% 0.1% 0.8% ---HSBC
Markets 0.5% 0.2% 0.4% 67.5
Hugh Johnson Advisors 0.4% 0.2% 0.5% 72.0
Ibersecurities 0.5% --- 0.5% 70.0
IDEAglobal 0.5% 0.2% 0.3% 70.0
IHS Global Insight 0.5% 0.2% 0.6% 66.5
Informa Global Markets 0.6% 0.2% 0.4% ---ING
Financial Markets 0.5% 0.2% 0.6% 70.0
Insight Economics 0.5% 0.2% 0.4% 65.0
Intesa-SanPaulo 0.5% 0.2% 0.5% ---ITG
Investment Research 0.4% 0.2% --- ---J.P.
Morgan Chase 0.4% 0.2% 0.5% 69.0
Janney Montgomery Scott 0.6% 0.1% 0.4% ---
Jefferies & Co. 0.5% 0.2% 0.6% 66.0
Landesbank Berlin 0.4% 0.1% 1.0% 68.5
Landesbank BW 0.7% 0.2% 1.0% 67.5
Manulife Asset Management 0.4% 0.2% 0.4% 69.0
MET Capital Advisors 0.5% --- 1.0% ---MF
Global 0.5% 0.2% 0.3% 67.5
Mizuho Securities 0.4% 0.1% 0.3% 67.5
Moody’s Analytics 0.5% 0.2% 0.6% 69.0
Morgan Keegan 0.5% 0.2% 0.2% ---
Morgan Stanley 0.5% 0.2% 0.7% ---
National Bank Financial 0.6% 0.1% 0.5% 70.0
Natixis 0.5% 0.2% 0.4% 66.2
Newedge 0.5% 0.1% 0.6% 70.0
Nomura Securities 0.5% --- 0.7% ---
Nord/LB 0.5% 0.2% 0.5% 68.0
OSK Group/DMG 0.4% 0.2% 0.5% ---
Parthenon Group 0.5% 0.2% 0.9% 71.4
Pierpont Securities 0.5% 0.2% 0.7% 69.5
PineBridge Investments 0.4% 0.2% 1.0% 66.0
PNC Bank 0.5% 0.2% 0.4% ---
Raiffeisenbank International 0.4% 0.2% 0.8% 67.0
Raymond James 0.5% 0.2% 0.6% 65.0
RBC Capital Markets 0.4% 0.2% 0.7% 69.5
RBS Securities Inc. 0.4% 0.1% 0.5% 68.0
Scotia Capital 0.4% 0.2% 0.4% ---
Societe Generale 0.5% 0.2% 0.9% ---
State Street Global Markets 0.5% 0.2% 0.6% 69.3
Stone & McCarthy Research 0.4% 0.2% 0.5% 69.0
TD Securities 0.4% 0.1% 0.7% 70.0
UBS 0.4% 0.1% 0.7% 70.0
UniCredit Research 0.5% 0.2% 0.4% 69.0
Union Investment 0.5% 0.2% 0.4% 66.0
University of Maryland 0.5% 0.2% 0.6% 69.0
Wells Fargo 0.6% 0.2% 0.5% ---
Westpac Banking 0.6% 0.1% 0.7% 66.0
Wrightson ICAP 0.4% 0.1% 0.4% 67.0
==============================================================
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
Rate this Page