Economy Watch: CPI Sees Gas-Inspired Uptick
- Apr 16, 2012
U.S. consumers were paying a bit more for everything in March, according to the Bureau of Labor Statistics on Friday. According to the agency, the Consumer Price Index was up 0.3 percent during the month. Over the last 12 months, the all-items index was up 2.7 percent.
The main culprit in the March uptick was, naturally, the price of gas, though the rise wasn’t as much as in February (and prices have been falling in more recent, early April days). Still, for March the BLS gasoline index was up 1.7 percent, and for the last 12 months, up 9 percent. Declines in the prices of electricity and especially natural gas, however, kept the energy index up only 0.9 percent month-over-month, however.
Despite the uptick in the price of gas, food hasn’t budged much for consumers lately, unlike in 2008, when energy inflation drove temporary but unsettling increases in the prices of basic foodstuffs. Food at home was up 0.1 percent for the month, while going to restaurants was 0.2 percent more expensive. Without energy and food, the “core” index was up 0.2 percent in February, and 2.3 percent for the previous 12 months.
Consumers a little more nervous in March
Gas prices (and other nervousness) seemed to be eating into consumer’s assessment of the economy in March, according to the latest Reuter’s/University of Michigan’s Consumer Sentiment Index, which was released on
Friday. The index dropped from 76.2 to 75.7. Not a huge drop, but a noticeable one. Still, it represented the fourth month in a row that the index topped 75 (last summer, it was hovering around 55 for a while).
The current conditions component pulled to index down in March by dropping an unusually steep 5.4 points. On the other hand, consumers remain relatively cheerful in their six-month outlook: up 2.7 points to 72.5, which is the best that expectations have been since the before the dark days of 2009. Moreover, consumers are also expecting lower inflation ahead: 3.4 percent for the next 12 months, which is lower than in February, but still higher than the previous 12 months’ actual inflation.
Best Buy to shuttle stores
Over the weekend, the giant electronics retailer Best Buy said that it would close about 50 stores out of its total of around 1,100. The announcement came not long after the sudden resignation of CEO Brian Dunn, for as-yet unclear but possibly scandalous reasons, though it seems unlikely that the two events are directly related.
In any case, Best Buy said the stores would be closed by May 12. More were in California than anywhere else (seven), though Illinois and Minnesota are both seeing six stores close. Closures will also occur in 18 other states and Puerto Rico. Despite the closings, the company says that it will continue to remodel other stores and roll out smaller-format stores called Best Buy Mobile.
Wall Street, on the heels of a spurt of optimism, sank into a funk again on Friday, with the Dow Jones Industrial Average going down 136.99 points, or 1.05 percent. The S&P 500 was down 1.25 percent and the Nasdaq declined 1.45 percent.