1. Food and beverages
3. Clothes and Services
5. Medical service
7. Other goods and services
1. Food, drink, tobacco
2. Clothing, shoes
3. Rents & energy - Of which: rents energy excl. fuel
4. Furniture, household goods
5. Health and body care goods
6. Traffic and news transmission
7. Education, leisure goods
8. Personal equipment, others
The report is released for the previous month by the Bureau of Labor Statistics, a unit of the Department of Labor, at 08.30 am Washington DC time in the second half of the month following the reporting month. The data on consumer prices is the last report, characterizing the inflationary component in different branches of economy after the export and import pricing data and industrial prices report.
Peculiarities of the CPI behaviour. The major difference in the CPI structure is between goods and services. Goods make up nearly to 44% of the index and services – 56%. There are two rules for consideration of inflationary trends of two sectors.
The inflation in the goods sector is more changeable, than the inflation in the services one. The main reason is that goods, or tradable sector, depend heavily on food and energy prices. These two components occupy nearly half of the commodity element and price changes are especially significant.
The inflation of the services sector is less changeable during the trade cycle, and is behind the inflation of goods. The highs and lows of services prices are in arrears of price fluctuations in the goods sector for 6 months on average.
When the CPI is published, the market initially draws attention to month-on-month changes and to basic elements which give the highest inflation rate (prices on energy and food). The annualized CPI figures cause less interest. As soon as the market gets the information about the core inflation as well as statistics on food and energy, the attention will turn to any unexpected changes in these areas. It is necessary to pay attention to:
Inflation changes in separate categories, as they cause changes on the financial markets. The more noticeable changes are, the more significant they are.
The behavior of any category with inflationary movements that may be the most influential and unexpected. When unpredictable changes come to the sector for which they are unusual then they are less powerful, than price motions in the sector of the core inflation. It is necessary to consider that separate components are interrelated, for example, energy is not summarily calculated, as it is included in many other services and tradable components.
You should first of all remember that inflation has its own cycle which is behind the GDP growth cycle. That is why the review of average monthly changes in the CPI may misinform, as they are too similar at each period of the trade cycle. This also refers to the core CPI. The core CPI value shows average and more correct data on the consumer prices cycle, than the total CPI. Historically high and low levels of the core CPI frequently correspond to recessions and revivals, and only in two out of ten cases they do not correspond to norms in the recovery phase.