Asha Banglore notes:
"The core CPI, excluding food and energy, edged up 0.2% in
January, following a 0.1% increase in December. On a year-to-year basis, the core CPI
advanced 2.1% in January compared with a 2.2% increase in all of 2005. New car prices
rose 0.6% in January, after two monthly declines. The 0.1% increase in shelter
costs reflects a 0.1% increase in rent, a 0.2% gain in owner’s equivalent rent,
and a 0.5% increase in hotel prices. Airfares rose 1.2% after posting declines
in November and December. Apparel prices increased 0.3% in January after a 0.3%
drop in the prior month. The 1.5% annualized gain in the medical price index
represents a small deceleration in costs after posting a 5.3% annualized
increase during the three months ended December."
And what does this chart bode for corporate profits?
Your answer should help determine how you position your assets (equity, fixed income, or cash) and what your returns will look like this year (to be determined).
Non-energy Prices Lift Wholesale Prices in January
Northern Trust Global Economic Research
February 17, 2006