US Inflation Steady, As Benign CPI Report Damps Inflation Rancor

US Inflation Steady, As Benign CPI Report Damps Inflation Rancor

Inflation in the US matched estimates for December, data out Wednesday showed.

The latest read on CPI stateside comes as Fed officials debate the merits of dialing back monthly bond-buying later this year, and as some commentators speculate about the possibility of inflation accelerating quicker than policymakers expect.

CPI rose 0.4% MoM in December, in line with consensus and double November’s monthly rise. The YoY pace for the headline gauge was 1.4%, marginally “hotter” (and the scare quotes are there for a reason) than the 1.3% the market was looking for.

Core ticked 0.1% higher MoM and the YoY read stuck at 1.6% for the third consecutive month.

Food at home prices rose the most since June, but major grocery store food group indexes were mixed over the month, the government noted.

The energy index posted a seventh consecutive monthly increase. The gasoline gauge logged an 8.4% rise. Of course, the big picture story is a bit different. “Despite the monthly increase, the energy index fell 7% over the past 12 months,” the BLS said. “Energy commodity indexes fell sharply over the period, with the fuel oil index declining 20% and the gasoline index decreasing 15.2%.”

User car prices dropped again, marking the third straight monthly decline. Apparently, the pandemic-inspired surge in prices for previously-owned vehicles has run its course.

For lack of a better way to describe it, this was almost completely in-line, and thereby sterile and benign. Or at least as far as I can tell from a quick scan, which is all I’m inclined to give it absent a market reaction that suggests someone saw something notable.


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