Below is a summary of my post-CPI tweets.
Ah, CPI day!
Writing today from the skies above…Pennsylvania maybe? Hi Pennsylvania!
Not sure how well this will work…bear with me.
Street forecast for core is 0.182% or so m/m, rounding to 0.2% and 2.2% y/y.
But if core is only 0.187% m/m, y/y will rise to 2.3% after rounding. So a low hurdle for a “surprise”
Since this year core has averaged 0.208% (and 0.243% ex-March), I suspect a good chance of a 2.3% y/y print.
Over the next 2 months we have comparisons of 0.173% and 0.155% from year-ago, so core likely rises further.
As a reminder, median CPI is already at 2.53% and a 7-year high so such a move in core isn’t a shock.
But all that is in the future. We get today’s CPI in 14 minutes.
Note my response to tweet messages will be worse than normal today… from 35,000 feet this is a bit wonky.
17% on core. y/y to 2.23% from 2.24%. Be still my heart.
Have to wait for the breakdown…not trusting numbers at this altitude. But looks like Medical Care jumped. Not sure what went dn then.
OK, Housing 2.39% from 2.38%. Apparel 0.42% from 0.53%; Medical Care – 3.65% from 3.17%! Small drips elsewhere.
Core services stayed 3.2% and core goods dripped to -0.6% y/y.
Within Housing: Primary rents 3.81% from 3.80%. Should keep rising. OER 3.25% from 3.26% ditto.
Big jump in Lodging Away from Home: small category and volatile but excites some people. Not me.
Motor vehicles -0.82% from -0.50%, still dragging on core goods.
In Medical Care: Drugs 3.40% from 2.34%. Yes, >1% acceleration in y/y. Volatile but…
Balancing that a bit was Professional Services 2.60% from 2.81%. But Hospital Services 4.12% from 3.25%.
And Health Insurance? +7.10% vs 6.30%. Thanks, ACA.
With drugs pushing core goods higher, not sure what was going the other way enough to make core goods decelerate some.
Good Lord they just said we’re over Wisconsin. Already?
Take this projection for Median CPI with a grain of salt, but looks to me like +0.19% and the annual rate stays 2.5%.
biggest monthly declines were toddlers’ apparel, jewelry and watches, footwear, and used cars/trucks.
biggest monthly gains in fuel oil, motor fuel, car and truck rental, and medical care commodities (drugs).
core ex-housing still fairly low at 1.37%.
Overall – core and median inflation still are in rising trends, but nothing particularly alarming about this month’s figure.
Certainly, nothing that is going to turn Pres. Mester from talking about helicopter drops to talking about tightening.
That’s all for now…thanks for bearing with me.
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