CPI excluding OER is at 2.7% YOY, just 20 bp from the Fed's target for it. OER is once again the hottest single category, but at 8% YOY we've just printed the first sequential decline since this inflation cycle began. Sure, Powell can gripe that his pet "core services ex-housing" index is still at 5.25% YOY, but that's the lowest in the year since he first panicked about suddenly non-transitory inflation (just when it was becoming transitory, by the way). If today's data can't stay the Fed's hand, then they are officially delusional. Update (June 14) -- PPI is in collapse, with final demand at a mere 1.2% year-on-year, and almost all sub-categories in outright deflation. Remember: PPI is the gateway drug to CPI. Deflation is coming.
US CPI/PPI
US CPI/PPI
Wednesday, May 10, 2023
Best CPI report ever. The CPI version of Powell's unpublished key index, core services ex-OER, took another big drop on a YOY basis, and on a MOM basis it's just 3.9%. If he can't admit this is clear and compelling evidence of inflation abating, he's a liar. But we already knew that.
US CPI/PPI
Wednesday, April 12, 2023
Good news. Without just one item Owners Equivalent Rent, CPI was actually negative on the month. And Powell's secret index -- core goods without shelter -- is decelerating. Next challenge for the Fed: find the bad news here.
US CPI/PPI
Tuesday, March 14, 2023
With a white-knuckles potential bank run going on, nobody cares about CPI apparently. Sadly, though, Jay Powell's secret private index (core services ex-shelter) didn't decelerate.
US CPI/PPI
Tuesday, February 14, 2023
CPI at consensus. Virtually the entire monthly gain was just five items out of hundreds -- in the lead, of course, owner's equivalent rent, which was upwardly weighted in the new weighting scheme. Core ex-OER grew at a mere 3.1% on an annual rate in January.
US CPI/PPI
Thursday, January 12, 2023
CPI right at expectations -- deflation for December on a headline basis. For the fault-finders looking to keep the out-of-control inflation narrative alive, focus on the acceleration of owners' equivalent rent. But even Powell isn't looking at that anymore. Oh, and by the way, year-over-year M2 growth is now just one basis point. You're going to hear the word "deflation" a lot later this year.
US CPI/PPI
Tuesday, December 13, 2022
Smells like victory. Headline and core CPI both negative on the month, if you exclude OER (which Powell told us two weeks ago that he does).
US CPI/PPI
Tuesday, November 15, 2022
We've republished last week's CPI report to include this morning's astonishingly good PPI data. See pages 11 and 12 -- a cascade of disinflationary progress marching monotonically through the stages of production.
US CPI/PPI
Thursday, October 13, 2022
Owners' equivalent rent, the laggiest (and largest) component, kept core elevated again. But other than that, Mrs. Lincoln, without OER, core CPI year-on-year peaked in February. Do you feel better now?
US CPI/PPI
Tuesday, September 13, 2022
The collapse in gasoline prices wasn't enough. Everything else ganged up to prevent a second-in-a-row month of headline deflation.