US December CPI +1.4% y/y vs +1.3% expected

Author: Adam Button | Category: News

December US inflation data

US CPI
  • Prior was +1.2%
  • Ex-food and energy 1.6% y/y vs +1.6% expected
  • CPI +0.4% m/m vs +0.4% expected
  • Prior +0.2% m/m
  • Ex-food and energy +0.1% m/m vs +0.1% expected
  • Prior ex-food and energy +0.2% m/m
Wage data:
  • Real avg hourly earnings +3.7% vs +3.2% y/y prior
  • Real avg weekly earnings +4.9% vs +4.7% y/y prior
There are no big surprises in the numbers and the initial market reaction has been tepid. On balance, the wage and inflation numbers are fractionally higher and at a pace of +0.4% m/m, the Fed will quickly hit its 2% target.

A real gut-check moment is coming in the March-June period when base effects will lead to some high headlines. The Fed says they can look through high numbers temporarily but even a hint that they're wavering would rattle markets.

Looking at the details of this report, the energy component was a driver, up 4.0%. Food pries continue to be driving perceived inflation, up another 0.4% to bring the y/y rise to 3.9%. Used vehicle prices remain up 10.0% y/y but have fallen for three straight months.

For bank trade ideas, check out eFX Plus
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose