Mar 18: CPI Advance 0.4%

The Consumer Price Index increased by 0.4% in February to 212.193(1982-84=100), expected a 0.3% gain, following a 0.3% gain in January which had been the first month since July that prices increased as fallen energy prices fueled deflation in the index’s market bundle. The recent modest gains in the CPI have calmed deflationary fears.  Over the year the index is up 0.2% after being flat in January.  The energy index increased by 3.3% over the month although is down 18.5% over the year, the gasoline index up by 8.3% in February while fuel oil and natural gas declined.  The food index fell by 0.1% over the month and is up 4.8% over the year. Excluding food and energy prices, which tend to be more volatile components of consumption, the Core CPI is up by 0.2% in February, and over the past year, the Core CPI increased 1.8%. The price indices for all major expenditure categories advanced for the month. 

The Current Account deficit fell to $132.8 billion for the 3rd quarter, down from a $181.3 billion deficit in the fourth quarter, coming in at the smallest deficit since the 4th Quarter of 2003.  The decrease came as a result of a decrease in the deficit on goods to $174.1 billion in the 4th quarter from $216.3 billion in the 3rd.  Also contributing to the deficit were the increase in the surplus on income and a decrease in net unilateral current transfers to foreigners.  A decrease in the surplus on services was partly offsetting.

Today at 2:15 PM will conclude a two day meeting of the board of governors making available FOMC Policy Statement where the topic for discussion was the commentary in the Fed's Beige Book.  Analysts anticipate no change will be made in interest rates, downward revisions to economic activity, upward revisions to downside risk, and perhaps aggressive moves to up its $1 trillion Term Asset-Backed Securities Loan Facility, as well as plans to purchase mortgage bonds or perhaps long-dated Treasuries to bolster lending activity.

Upcoming Releases
Initial Claims (03/19 at 8:30 AM EST)
Leading Indicators (03/20 at 10:00 AM EST)

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