-
November CPI report was out this morning. Headline CPI MoM rose 0.1% in November vs. 0% in October, 0.4% in September while the core CPI MoM rose 0.3% in November vs. 0.2% in October, 0.3% in September. Headline CPI YoY rose 3.1% in November vs. 3.2% in October, 3.7% in September, 3.7% in August, 3.2% in July, 3% in June, 4.0% in May, 4.9% in April and 5% in March. Core CPI YoY rose 4% in November vs. 4% in October, 4.1% in September, 4.2% in August, 4.7% in July, 4.8% in June, 5.3% in May, 5.5% in April and 5.6% in March. Indexes which increased in November include rent, owners’ equivalent rent, medical care, and motor vehicle insurance. The indexes for apparel, household furnishings and operations, communication, and recreation were among those that decreased over the month.
Wow, the core CPI didn’t really go down. People are calling for a rate cut in early 2024 but I don’t know if that will happen. Tomorrow the FOMC will publish their economic projections for 2024 along with the rate decision. We will have a better idea then but my bet is that the first rate cut will not happen in Q1 2024 given the jobs and inflation numbers.
Headline matters more to people.
Core matters more to Powell.
4% core is 100% above target.
Internals for core where not good. I was very surprised more progress wasn't made with commodity costs falling so much. It seems like anything with high services(labour) input costs came in hot.
If oil was at 100$/barrel, headline would be above 5%.
Headline is higher now than June of this year. Core has fallen 10bps in last 3 months. Very little progress has been made against inflation in the last 6 months even with rates at these levels and oil falling.
Wages continue to increase >4% YoY.
Anyways. That's my rant. Celebrating inflation coming down towards 2% target very premature IMO.