Recent data indicates that inflation in the United States is cooling down. The Consumer Price Index (CPI) was flat compared to the previous month and is 3.3% higher than a year ago, which is lower than economist estimates and cooler than April's data. When excluding food, energy, and shelter, the CPI is now at 1.9%. Every major CPI component, except Transportation, has a lower rate of inflation today than in June 2022, when CPI peaked at 9.1%. The Federal Reserve's CPI Nowcast for June remains subdued with all readings in the 0.0s to 0.2s. The core Personal Consumption Expenditures (PCE) index is expected to have risen around 0.08%-0.13% in May, translating to a 2.6% year-on-year core PCE inflation rate, down from 2.8% in April. Over the past year, headline ex-shelter is 2.1%, and core ex-shelter is 1.9%.
With the PPI and import price data in hand for May, the inflation modelers who map the CPI/PPI into the PCE now expect the core PCE index rose around 0.08%-0.13% in May That would translate to a 2.6% year-on-year core PCE inflation rate, down from 2.8% in April https://t.co/OBl1h348C0 https://t.co/OQFg9dKrLS
The Fed's CPI Nowcast for June remains subdued with all readings in the 0.0s to 0.2s. https://t.co/mGppvCOhv0 https://t.co/j5yxVgtLJZ
Extremely nerdy note: core inflation has been higher than headline. But this is NOT because volatile food and energy are driving disinflation. Itβs because excluding food and energy raises the weight of shelter. Over the past year, headline ex-shelter is 2.1, core ex-shelter 1.9.
PCE shelter story is like 16%-17% of the index where it's much more on CPI, so the base effects take hold in the 2nd half of 2024. Hence, the Fed wants to reduce wage growth to 3% or call it a night when labor breaks. Focus will be more month to month now https://t.co/uxpgWqP8mY https://t.co/X2Ud1Vx36F
With the exception of Transportation, every major CPI component has a lower rate of inflation today than in June 2022 when CPI peaked at 9.1%. Video: https://t.co/ROTX0ndBtf https://t.co/JG2ynwXhgc
Americans plagued by surging prices got another sign Wednesday that inflation is finally cooling. The CPI was flat compared to the previous month. and 3.3% higher than a year ago β cooler than April's data and lower than economist estimates. https://t.co/5kP772bha6
Back out food, energy, and shelter, and CPI is now 1.9% https://t.co/hXE5G4vuPA
Back out food, energy, and shelter, and CPI is now 1.9% @yardeni https://t.co/RJMH9Pxzhi