Tag Archives: CPI inflation consumer prices energy oil gasoline


Is something amiss in the energy statistics in today’s CPI update?
The question comes to mind after reading the press release for the report on consumer prices in February. In particular, the CPI’s “special” energy index posts a 0.5% decline for last month, which presumably is a contributing factor for why CPI inflation overall is reported as unchanged for February. Given all the chatter about inflation risk of late, the news that the CPI change last month was zero is surprising, at least to this reporter. Even more surprising is the reported decline in energy prices as per the CPI numbers, a drop that contrasts with the sharp increases in spot prices in February 2008 for four primary energy commodities, according to Barchart:
crude oil: + 11.0%
gasoline: +7.5%
natural gas: +12.5%
heating oil: +12.3%
The first step in trying to explain the gap is that the spot price changes are nominal fluctuations whereas the CPI energy index decline is “seasonally adjusted.” But adjusting for seasonality is, at best, only a partial solution since CPI’s “unadjusted” energy index also fell in February, albeit by a relatively modest -0.1%.

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