2017 Economic Calendar
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Released On 11/15/2017 8:30:00 AM For Oct, 2017
PriorConsensusConsensus RangeActual
CPI - M/M change0.5 %0.1 %0.0 % to 0.3 %0.1 %
CPI - Y/Y change2.2 %2.0 %2.0 % to 2.3 %2.0 %
CPI less food & energy- M/M change0.1 %0.2 %0.1 % to 0.3 %0.2 %
CPI less food & energy - Y/Y change1.7 %1.7 %1.7 % to 1.9 %1.8 %

Very slight improvement is the message from October's consumer price report where all key readings, except for one, did no better than meet expectations. The CPI managed only a 0.1 percent rise in the month with the year-on-year rate sinking 2 tenths to 2.0 percent. The core rate, which excludes food and energy, managed only a 0.2 percent monthly rise though the yearly rate, and this is the good news, rose 1 tenth to a slightly better-than-expected 1.8 percent.

Deep contraction in wireless services prices has been holding down consumer prices most of the year but not the last two months as this closely watched sub-component has now put together back-to-back gains of 0.4 percent. Also improving in the month were housing costs, up 0.3 percent, and medical costs, also up 0.3 percent. But there are stubborn areas of weakness including new vehicles, down 0.2 percent, and prescription drugs, also down 0.2 percent.

But the annual core rate is moving, however slowly, in the right direction toward the Fed's 2 percent goal. Traction in wireless services is a help and perhaps also are wages which have been showing glimmers of isolated strength in recent months. Still, today's report won't settle the controversy between the doves, who haven't seen enough inflation to convince them that it's improving, and the hawks who keep expecting the low unemployment rate to give inflation a boost.

Consensus Outlook
Consumer inflation has been soft and moderation in housing and medical costs held down the core CPI in September which rose only 0.1 percent. When including food and also energy which spiked on one-time hurricane effects, the overall CPI rose an outsized 0.5 percent. For October, forecasters see the overall CPI rising 0.1 percent with the less food & energy rate at 0.2 percent. Year-on-year, the CPI is seen at 2.0 percent with the core at 1.7 percent.

The Consumer Price Index is a measure of the change in the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation for the consumer. Annual inflation is also closely watched.

The consumer price index is available nationally by expenditure category and by commodity and service group for all urban consumers (CPI-U) and wage earners (CPI-W). All urban consumers are a more inclusive group, representing about 87 percent of the population. The CPI-U is the more widely quoted of the two, although cost-of-living contracts for unions and Social Security benefits are usually tied to the CPI-W, because it has a longer history. Monthly variations between the two are slight.

The CPI is also available by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for many metropolitan areas. The regional and city CPIs are often used in local contracts.

The Bureau of Labor Statistics also produces a chain-weighted index called the Chained CPI. This measures a variable basket of goods and services whereas the regular CPI-U and CPI-W measure a fixed basket of goods and services. The Chained CPI is similar to the personal consumption expenditure price index that is closely monitored by the Federal Reserve Board.  Why Investors Care
It is always a good idea to look at more than a few months of data to get a sense of changes in established trends. Monthly changes in the CPI are mainly volatile because of sharp fluctuations in food and energy prices. The core CPI eliminates the sharper fluctuations.
Data Source: Haver Analytics
Yearly changes tend to smooth out more severe monthly fluctuations and give a better idea of the underlying rate of inflation. Even with the smoother trend, note that the core CPI does not fluctuate as much as the total CPI.
Data Source: Haver Analytics

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