Non-energy Prices Lift Wholesale Prices

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
Asha Bangalore
Northern Trust Global Economic Research
February 17, 2006

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What's been said:

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  1. todd commented on Mar 3

    the market seems really dull to me right now… everybody is well established in their ideas and positions. we’re going to need something big to tip the market either way. anytime someone mentions “core CPI” I start getting sleepy.

    in the meantime…. Have you checked out this guy yet??

    —-> Matisyahu “King without a Crown”
    He’s a Hasidic Jewish Reggae rapper from the Crown Heights! He doesn’t perform on Friday or Saturday and won’t touch female fans. Sounds like a joke, but it’s not… REALLY great music. Check it out when you get a chance!

  2. spencer commented on Mar 3

    this chart tells you little or nothing about profits unless you compare it to changes in unit labor costs. If they are rising faster then prices, profits tank, but if they are rising less then prices profits soar.

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