Consumer prices fall record 1% on record energy drop – MarketWatch
by Tom on November 19, 2008
in Market Musings
U.S. consumer prices declined a record 1% in October, seasonally adjusted, as energy prices fell a record 8.6%, the Labor Department reported Wednesday. Data on the overall CPI date back to 1947, and the energy data go back to 1957.
Meanwhile, food prices in October rose 0.3%, the smallest gain since May.
The core consumer price index – which excludes food and energy prices – fell 0.1%, the first time there’s been a decline in the core rate since 1982.
Economists surveyed by MarketWatch had expected the overall October CPI to fall 0.9%, and for the core to rise 0.1%.
Consumer prices fall record 1% on record energy drop – MarketWatch.
Okay, let’s look at this step by step:
1. The overall CPI dropped 1% – mainly because energy fell 8.6%. No surprises there, except for the fact that it’s the largest drop on record and they’ve been keeping the records since my Dad was 10.
2. Food prices rose .3% but that’s the smallest gain since May.
3. Core consumer prices (without food and energy) dropped .1%. Normally this would be a market moving event and so far this morning, the 10 year bond is plummeting. Time will tell if mortgage rates will follow or whether other issues will counteract that with mortgages.
Stay tuned, could be an interesting day!
