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CPI Preview vs Realized CPI
1. #CPI data came out largely in line with our expectations. Our expectations were for a print of 0.17%, while the print came in at 0.10%. Below, we show the composition of our estimates relative to the realized print:
1. #CPI data came out largely in line with our expectations. Our expectations were for a print of 0.17%, while the print came in at 0.10%. Below, we show the composition of our estimates relative to the realized print:
2. Our pre-view note mentioned two factors we would be watching out for. First, we were looking to see whether #motor vehicle inflation remains persistent.
3. Given the industry dynamics we monitor, there was a potential for new cars to see deflation as manufacturing productions alleviate some degree of supply shortages. Nonetheless, #used car inflation likely showed significant potential to re-accelerate this month.
4. Second, we were looking to see if #housing inflation could continue the deceleration we had seen in the last few prints. If this were the case, then it would confirm that our expectations of disinflation in housing are taking hold.
prometheus-research.net/p/the-observat…
prometheus-research.net/p/the-observat…
5. The latest print #confirmed our expectations on both fronts: used car inflation came in strong, while shelter inflation continued its descent.
6. More specifically, we zoom into transportation sector inflation. As we can see above, used vehicle prices were the primary driver of transportation inflation, as expected. This dynamic is likely to be an ongoing support to #inflationary pressures.
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