US CPI for the month of October 2019

  • CPI MoM 0.4% versus 0.3% estimate
  • CPI ex food and energy MoM 0.2% versus 0.2% estimate
  • CPI YoY 1.8% versus 1.7% estimate
  • CPI ex food and energy YoY 2.3% versus 2.4% estimate
  • Real average weekly earnings YoY 0.9% versus 1.0% last month
  • real average hourly earnings YoY 1.2% versus 1.3% last month

The headline number was higher than expectations. The September tariffs may have had an impact.

The Labor Department said that consumers paid more for energy (+2.7% versus -1.4% last month). Energy accounted for more than half the increase in the CPI according to Labor Department. Healthcare (+1% - the largest since August 2016), and food (+0.2%) and owner equivalent rent a primary residence (+0.2%) also gained. The gain in the CPI MoM was the largest since March. Used motor vehicles and truck prices increase 1.3% after a -1.6% decline in September. Apparel prices fell by at -1.8%.

The ex food and energy was more contained after a 0.1% gain in September. Healthcare costs jumped the most in more than 3 years.

The ex food and energy year on year rose by 2.3% which was lower than the 2.4% estimate. THis is higher than the Feds preferred inflation measure the core PCE which rose by 1.7% in September. However, this data suggest that the core PCE should pick up whens its October reading is released later this month.