February Inflation Virtually Flat

The U.S. Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index report on March 12^th 2019, for the 12 months through February 2019.

Annual Inflation is Down (Slightly)

Annual inflation in February was down very slightly from January’s 1.55% to 1.52%
February’s CPI was 252.776 January’s CPI was 251.712 up from December’s CPI of 251.233, November was 252.038
Monthly Inflation for February was 0.42%, slightly below last February’s 0.45%. December was -0.32%, November was -0.33%.
Next release April 10^th
We’ve added another bar to the Annual Inflation Rate Chart indicating Quantitative Tightening (QT) check it out here.

Annual inflation peaked at 2.95% in July 2018 (almost double the current rate) and was down to 2.18% in November, 1.91% in December, 1.55% in January, and 1.52% in February. Monthly inflation was 0.42% in February 2019 down slightly from 0.45% in February 2018.

Monthly Inflation:

According to the BLS commissioner’s report, “In February, the Consumer Price Index for All Urban Consumers increased 0.2 percent on a seasonally adjusted basis; rising 1.5 percent over the year, not seasonally adjusted. The index for all items less food and energy rose 0.1 percent in February (SA); up 2.1 percent over the year (NSA).”

Current levels are below the top of the downward channel and the short term direction appears to be down. Based on our two decimal place calculations the CPI-U was virtually unchanged going from 1.55% last month to 1.52% this month. This shows how small the change actually was however because the BLS rounds to one decimal point their numbers went from 1.6% last month to 1.5% this month making the change appear slightly larger than it actually was.

However, monthly inflation was still significant at 0.42% down slightly from last year’s 0.45%.

Oil Price inflation

This month we have updated the Crude Oil Inflation Chart which shows historical crude oil prices and also what they would be if you adjusted them for inflation as of February 2019. We have also updated the Annual Crude Oil Prices Table and the Monthly Crude Oil Prices Table both of which also show prices adjusted for inflation.

Federal Reserve Actions

The Federal Reserve took a more active part in 2018 than it had in recent years both in raising interest rates and in Quantitative Tightening (QT).

Quantitative Tightening (QT) Begins

For more info See NYSE ROC and MIP.

Seasonally Adjusted Inflation Table

From the table above we can see that on a monthly Seasonally adjusted basis the biggest gainer was Fuel Oil at 2.6% after being down significantly the previous month.Interestingly, Utility “piped” gas was down -2.4%.

The lowest monthly inflation is typically during the last quarter (October through December) with June through September typically being moderate. Surprisingly, July came in negative in both 2016 and 2017. There was not a single negative July from 1950 through 2000 but there have been several since.

Inflation Forecast

Last month we projected a slightly falling inflation rate inflation didn’t quite fall as much as we projected. We projected that it would fall to at least 1.5% but instead it only fell to 1.52%.

See our Moore Inflation Predictor to see our current projections.

Not Seasonally Adjusted Monthly Inflation Rates

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2016	0.17%	0.08%	0.43%	0.47%	0.41%	0.33%	(0.16%)	0.09%	0.24%	0.12%	(0.16%)	0.03%
2017	0.58%	0.31%	0.08%	0.30%	0.09%	0.09%	(0.07%)	0.30%	0.53%	(0.06%)	0.00%	(0.06%)
2018	0.54%	0.45%	0.23%	0.40%	0.42%	0.16%	0.01%	0.06%	0.12%	0.18%	(0.33%)	(0.32%)
2019	0.19%	0.42%

See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.

Not Seasonally Adjusted Annual Inflation (by Category)

Category	Annual
All Items	1.52%
Food	2.0%
Energy	-5.0%
All Items less Food and Energy	2.1%
Apparel	-0.8%
New Vehicles	0.3%
Used Cars and Trucks	1.1%
Shelter	3.4%
Medical Services	2.4%
Transportation Services	1.1%

Regional Inflation Information

The U.S. Bureau of Labor Statistics also produces regional data. So if you are interested in more localized inflation information you can find it here.

Food and Energy Breakdown

The BLS publishes an index entitled “All items Less Food and Energy” which often causes people some confusion. It doesn’t mean they stopped including food and energy in the Consumer Price Index. It just means that they have broken them out so you can compare their increase to other components. In this chart we can see the effects of food, energy and all other items on the total index. For more info see What is Core Inflation?

Misery Index

The misery index as of March 2019 (based on the most recent official government inflation and unemployment data for the 12 months ending in February) is at 5.32% down from 5.55% in January and 5.81% in December and from 5.88% in November.

[Read More…]

NYSE Rate of Change (ROC)^©

The stock market has taken a beating over the couple of months.in response to
FED Tightening throughout 2018.
This month we discuss the FED actions, Reversals And Counter-trend Moves, and current Support and Resistance lines.

See the NYSE ROC for more info.

The ANNUAL rate of return for the NASDAQ ROC rebounded sharply last month up to +4.08% for the previous 12 months. Unfortunately, this month it has fallen back to -0.40% annual return. However it actually had a 1.86% monthly increase but because March 2018 had an 8.36% increase this year appears to be a decline.

See NASDAQ ROC for more.

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