As the markets expected, energy jolted August headline CPI higher -- prices in that sector alone grew 92% at an annual rate. But that's an outlier. Core inflation has grown only 2.4% over the last three months at an annual rate. We're at the Fed's target in the measure Powell says is more important than headline.
US CPI/PPI
US CPI/PPI
Thursday, August 10, 2023
CPI year-over-year beats expectations, but rises because an anomalous year-ago comparable of zero rolls off. It’s all OER. Without it, CPI was almost unchanged on the month. Core excluding OER, the best measure of the true inflation signal, outright deflated on the month, and is now at a mere 3% year-on-year.
US CPI/PPI
Wednesday, July 12, 2023
CPI beats our already dovish expectations -- unrounded, CPI printed at 2.97% year-on-year, which is 93% back to the Fed's target in just 12 months since June's peak. Core fell too, to 4.8% year-on-year, and even lower at 3.2% month-on-month. Our favorite measure, Core ex-OER, actually deflated on the month. The Fed simply has to "skip" again.
US CPI/PPI
Tuesday, June 13, 2023
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
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 The CPI version of Powell's unpublished key index, core services ex-OER, took another big drop on a YOY basis, and on a MOM basis it's just 3.9%.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).