Economic Indicators: CPI Rose 0.2%; Leading Economic Indicators Up 0.1%

Consumer prices rose by 0.2% in January, compared to a 0.4% rise in December, according to the Labor Department. Core inflation, which excludes volatile energy and food components, rose by 0.3% in January, the largest one-month gain in seven months.

January Consumer Price Index (CPI) Highlights:

  • Energy prices dropped by 1.5%
  • Food prices were up 0.7%, the biggest rise since the spring of 2005
  • Cost of medical care up 0.8%, the biggest increase in more than 15 years
  • Airline ticket prices increased by 2.1%, the biggest gain since November 2004. 
  • Cost of tobacco products rose by 3.1%, the largest increase in 4 1/2 years.

For all of 2006, consumer prices increased 2.5%, the smallest increase in three years. 

Leading Economic Indicators:

The Conference Board's Index of Leading Economic Indicators, a key gauge of future economic activity, rose a small 0.1% in January, compared to 0.6% rise in December. 

Four of the ten indicators that make up the leading index increased in January:

  • The positive contributors were: real money supply, index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), and stock prices. 
  • The negative contributors were: average weekly manufacturing hours, building permits, manufacturers' new orders for nondefense capital goods, interest rate spread, vendor performance, and manufacturers' new orders for consumer goods and materials.

The leading index now stands at 138.5 (1996=100). 

Mortgage Applications Survey:

 The Market Composite Index, a measure of mortgage loan application volume decreased 5.2 percent on a seasonally adjusted basis from one week earlier, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ending February 16, 2007.   

The refinance share of mortgage activity decreased to 44.9 percent of total applications from 46.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 21.2 percent of total applications from the previous week.

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