CPI
We'll have our usual monthly inflation preview soon, but for those curious, here's a bit of a preview to the preview... We all should take heart in how 2022H2 highlighted the possibility and plausibility of a 'soft landing'—disinflation without more unemployment—at odds
For those who have followed my Twitter feed, you will know that I have long pointed out that "narrow vs broad-based," "transitory vs persistent," and "supply vs demand" are not three ways of saying the same thing.
A soft landing consensus for CPI? The forecasting consensus is sticking close to its November predictions, with a 0.3% increase expected for core CPI (falling from 6% to 5.7% year-over-year) and -0.1% for headline CPI (falling from 7.1% to 6.5% year-over-year) for December. A print
Market rents are decelerating, which means CPI-measured rents – and with them, core and headline CPI – should ultimately decelerate as well, with a lag. But is this deceleration due to the Fed’s actions? Or is it because job growth is slowing down endogenously, as many have been expecting over this
Not out of the woods yet on upside risks to monthly core CPI inflation: The forecasting consensus has shifted down from its 0.5% expectation for core CPI in October to a more optimistic 0.3% expectation in November. This seems to be mostly a reaction to the welcome core
Headline CPI: Modest upside risk vs. forecasting consensus * Consensus: 0.6% month-over-month, 7.9% year-over-year * Gasoline prices did not play a major role in October, with only a minor non-seasonally-adjusted increase from September to October at the retail level. * Energy services inflation should be more moderate given the correction in
September headline CPI inflation will likely come in near the consensus forecast of 0.2% as gyrations in commodity markets slow. In our view, upside risks weigh more heavily to the non-core components of inflation relative to consensus because of how the ‘Russia shock’ affects a number of food and
August headline CPI inflation will likely come in close to the consensus forecast at -0.1% – which would be the lowest single-month reading since the onset of the pandemic.
When we disaggregate the aggregate inflation statistics, we find that the sources of high inflation in the US and Europe are different.