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Friday, January 24, 2020 9:14:41 PM EST

CPI Updated 14-Jan-20 09:14AM ET

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% ( 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.
All Items0.2%0.3%0.4%0.0%0.1%
Food and Beverages0.2%0.1%0.2%0.1%0.0%
Equivalent Rent0.2%0.2%0.2%0.3%0.2%
Motor Fuel2.8%1.1%3.7%-2.4%-3.5%
Medical Care0.6%0.3%1.0%0.2%0.7%
Educ and Commun0.1%0.3%0.0%0.0%0.0%
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