The Consumer Price Index for December brought good news in relative terms, as there weren't any overshoots compared to expectations. Total CPI was up 0.2% m/m, as expected, while core CPI, which excludes food and energy, was up a softer-than-expected 0.1% (Briefing.com consensus +0.2%).
With the monthly changes, total CPI was up 2.3% yr/yr, versus 2.1% in November. Core CPI was up 2.3% yr/yr, unchanged from November.
The food index was up 0.2% m/m in December.
The energy index was up 1.4% m/m in December.
The shelter index rose 0.2% m/m and was a key driver of the modest uptick in core CPI.
The key takeaway from the report is that it won't cause any immediate re-think of the Fed's policy position. Core CPI has been up 2.3% yr/yr for three straight months, so the inflation rate isn't running away from the Fed, which seems to have adopted a willingness to let inflation run above its longer-run goal for a bit before moving on rates; moreover, the CPI data takes a backseat to the PCE price data as the Fed's preferred inflation gauge, and the latest report showed core-PCE inflation up just 1.6% yr/yr.| DEC | NOV | OCT | SEP | AUG | |
|---|---|---|---|---|---|
| All Items | 0.2% | 0.3% | 0.4% | 0.0% | 0.1% |
| Food and Beverages | 0.2% | 0.1% | 0.2% | 0.1% | 0.0% |
| Housing | 0.1% | 0.2% | 0.2% | 0.3% | 0.1% |
| Equivalent Rent | 0.2% | 0.2% | 0.2% | 0.3% | 0.2% |
| Apparel | 0.4% | 0.1% | -1.8% | -0.4% | 0.2% |
| Transportation | 0.5% | 0.3% | 1.0% | -0.7% | -0.6% |
| Vehicles | -0.3% | 0.2% | 0.5% | -0.6% | 0.3% |
| Motor Fuel | 2.8% | 1.1% | 3.7% | -2.4% | -3.5% |
| Medical Care | 0.6% | 0.3% | 1.0% | 0.2% | 0.7% |
| Educ and Commun | 0.1% | 0.3% | 0.0% | 0.0% | 0.0% |
| Special Indices | |||||
| Core | 0.1% | 0.2% | 0.2% | 0.1% | 0.3% |
| Energy | 1.4% | 0.8% | 2.7% | -1.4% | -1.9% |
| Services | 0.2% | 0.3% | 0.3% | 0.2% | 0.2% |
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