Economy Watch: CPI Sees Uptick, Driven by Gas
- Apr 16, 2012
By Dees Stribling, Contributing Editor
U.S. consumers were paying a bit more for everything in March, according to the Bureau of Labor Statistics on Friday. According to the agency, the Consumer Price Index was up 0.3 percent during the month. Over the last 12 months, the all-items index was up 2.7 percent.
The main culprit in the March uptick was, naturally, the price of gas, though the rise wasn’t as much as in February (and prices have been falling in more recent, early April days). Still, for March the BLS gasoline index was up 1.7 percent, and for the last 12 months, up 9 percent. Declines in the prices of electricity and especially natural gas, however, kept the energy index up only 0.9 percent month-over-month, however.
Despite the upswell in the price of gas, food hasn’t budged much for consumers lately, unlike in 2008, when energy inflation drove temporary but unsettling increases in the prices of basic foodstuffs. Food at home was up 0.1 percent for the month, while going to restaurants was 0.2 percent more expensive. Without energy and food, the “core” index was up 0.2 percent in February, and 2.3 percent for the previous 12 months.
Consumers a Little More Nervous in March
Gas prices (and other nervousness) seemed to be eating into consumers’ assessment of the economy in March, according to the latest Reuters/University of Michigan Consumer Sentiment Index, which was released on Friday. The index dropped from 76.2 to 75.7. Not a huge drop, but a noticeable one. Still, it represented the fourth month in a row that the index topped 75 (last summer, it was hovering around 55 for a while).
The current conditions component pulled to index down in March by dropping an unusually steep 5.4 points. On the other hand, consumers remain relatively cheerful in their six-month outlook: up 2.7 points to 72.5, which is the best that expectations have been since the before the dark days of 2009. Moreover, consumers are also expecting lower inflation ahead: 3.4 percent for the next 12 months, which is lower than in February, but still higher than the previous 12 months’ actual inflation.
Wall Street, on the heels of a spurt of optimism, sank into a funk again on Friday, with the Dow Jones Industrial Average going down 136.99 points, or 1.05 percent. The S&P 500 was down 1.25 percent and the Nasdaq declined 1.45 percent.