Energy price swings have modest impact on inflation -NY Fed

NEW YORK, Dec 1 (Reuters) - The effects of crop and energy price swings on U.S. inflation are smaller than analysts might expect, according to research by the New York Federal Reserve published on Monday.

The research also found that swings in commodity prices affect the price of only a narrow range of goods bought by U.S. consumers.

Slightly less than half of the growth in the personal consumption expenditures index and just less than a third of the growth in the core index between June 2006 and June 2008 can be attributed to crop and energy prices, the research found.

While the study focused on the impact of commodity price increases on inflation, author Brad Hobijn said the steep declines in oil and grain prices in the second half of 2008 could be calculated the same way and should be proportional.

"Our results suggest that commodity prices are not the controlling force in core inflation dynamics they are sometimes assumed to be," Hobijn wrote.

Higher crop prices mainly lead to price hikes for food, tobacco and gardening supplies, while rising oil prices mostly influence fuel, energy and transportation prices, Hobijn wrote.

Therefore, increases in PCE inflation beyond food, energy, utilities and transportation are unlikely to stem from increases in grain, soy, oil, or natural gas prices, he said.

For that reason, higher prices in core consumer goods and services signal other inflationary pressures "are undoubtedly at work," he wrote.

From June 2006 through June 2008, crude oil and grain prices soared, a trend that was sharply reversed in the second half of 2008, leading to concerns about possible deflation.

The Reuters-Jeffries CRB index .CRB, a global commodities benchmark, rose about 30 percent from June 2006 to June 2008, and has fallen about 46 percent so far in the second half of 2008.

(Reporting by Kristina Cooke; Editing by Dan Grebler)