US CPI Feb 2023
  • Prior was +5.5%
  • m/m CPI +0.4% vs +0.4% expected
  • Prior m/m reading was +0.5%
  • Real weekly earnings -0.4% vs +0.7% prior (revised to +0.3%)

Core inflation :

  • Ex food and energy +5.5% vs +5.5% y/y expected
  • Prior ex food and energy +5.6%
  • Core m/m +0.5% vs +0.4% exp
  • Prior core m/m +0.4%
  • Core services ex shelter +0.43% vs +0.265% prior

There are some people who want to disregard this report because of the bank run and the likelihood the Fed will slow down with rate hikes (or stop them altogether) until the dust settles. That's right in the shortest term but this report is still a big deal for Fed policy in May and beyond.

Overall, the data is close to expectations. The m/m core is a touch hot but the y/y number was in line so I think it will be forgiven, especially with the weekly earnings number surprising lower.

More details (m/m)

  • Used cars -2.8% vs -1.9% prior
  • New cars +0.2% vs +0.2%
  • Shelter +0.8% vs +0.7% prior
  • Transportation services +1.1% vs +0.9% prior
  • Energy -0.6% vs +2.0% prior
  • Food +0.4% vs +0.5% prior

I'm not sure where that energy inflation is coming from. Oil prices have been stable or falling, so I assume it's lagged pass-through from natural gas prices.

Here's a chart of core CPI from Zerohedge excluding shelter, which is a metric the Fed is targeting. It's starting to come down but the monthly rise of +0.43% is the highest since September.

US CPI core ex shelter