CPI Data Shows Initial Effects of Oil Price Drop
Economic Report Monitor #13
April 10th, 2020
It's Good Friday, and markets are taking a respite from roller coaster ride. Economic reports were sparse with the exception of the March CPI report which reported the largest monthly decline since January 2015. The severe slowing was mostly caused by the precipitous decline in energy CPI index which was down -5.7%. Gasoline and fuel oil saw the largest declines at -10.5% and -13.7% as a combination of an increase in supply and a sudden decline in demand sent consumer fuel costs lower. Energy services were only mostly flat at -0.5%.
The other categories that saw CPI declines were sensitive to the demand shock resulting from the lockdown. Apparel saw a drop of -2.0%, and new vehicles were down -0.4% as nonessential businesses were shuttered. Transportation services fell an abrupt -1.9% consistent with the severe drop in traveling both locally and beyond state borders. The airline fare index alone dropped -12.6% following an initial drop of -0.3% in February. Medical care services rose 0.5% and continue to run well over normal CPI increases at a 5.5% increase annually. April CPI should see even more movement as the surveyors get a view of data from a full month of lockdown.
It's Good Friday, and markets are taking a respite from roller coaster ride. Economic reports were sparse with the exception of the March CPI report which reported the largest monthly decline since January 2015. The severe slowing was mostly caused by the precipitous decline in energy CPI index which was down -5.7%. Gasoline and fuel oil saw the largest declines at -10.5% and -13.7% as a combination of an increase in supply and a sudden decline in demand sent consumer fuel costs lower. Energy services were only mostly flat at -0.5%.
The other categories that saw CPI declines were sensitive to the demand shock resulting from the lockdown. Apparel saw a drop of -2.0%, and new vehicles were down -0.4% as nonessential businesses were shuttered. Transportation services fell an abrupt -1.9% consistent with the severe drop in traveling both locally and beyond state borders. The airline fare index alone dropped -12.6% following an initial drop of -0.3% in February. Medical care services rose 0.5% and continue to run well over normal CPI increases at a 5.5% increase annually. April CPI should see even more movement as the surveyors get a view of data from a full month of lockdown.
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