Following February's big bounce back MoM, Consumer Prices in March rose 0.2% MoM (less than the expected 0.3% rise) but it is YoY that is the great news for Americans. CPI fell 0.1% YoY in March (below expectations of unch) which means Consumer Prices haven't risen YoY in 3 months. However, while this clear disinflationary signal is peersisrtent, Core CPI continued to rise 1.8% from last year (above the 1.7% consensus) driven by big jumps in the cost of shelter (thank you Fed) and healthcare (thank you Govt); which should send shivers through the risk-bulls as The Fed may be forced to pull rate hikes forward.
Consumer prices have not risen in 3 months..
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The monthly change:
On an annual basis, there is now a huge divergence between Core and Headline CPI, mostly as a result of dropping energy prices impacting the headline data:
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The full breakdown...
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With Core CPI surging due to Shelter and Healthcare...
The index for all items less food and energy has risen 1.8 percent over the past 12 months, a slight increase from the 1.7 percent increase for the 12 months ending February. Over the last 12 months, the shelter index has risen 3.0 percent, while the medical care index has increased 2.5 percent. The indexes for used cars and trucks, for apparel, and for airline fares have all declined over the past year.
As for food and energy:
The food index declined 0.2 percent in March after a 0.2-percent increase in February. The index for food at home turned sharply down in March, falling 0.5 percent. Five of the six major grocery store food group indexes declined. The fruits and vegetables index posted the largest decrease, falling 1.4 percent, its third decline in a row. The index for nonalcoholic beverages, which rose 0.6 percent in February, fell 0.6 percent in March. The index for dairy and related products fell 0.5 percent, as did the index for meats, poultry, fish, and eggs. The index for beef and veal, however, rose for the fourteenth month in a row, increasing 0.1 percent. The index for other food at home fell 0.1 percent in March after rising in February. The only major grocery store food group index to increase in March was cereals and bakery products, which increased 0.4 percent after declining in February. The food at home index has increased 1.9 percent over the past 12 months. Five of the six groups have risen over that span, with meats, poultry, fish, and eggs increasing the most, at 6.0 percent. The fruits and vegetables index, however, has declined 1.1 percent over the last 12 months. The index for food away from home rose 0.2 percent in March and has increased 2.9 percent over the past 12 months.
The energy index rose 1.1 percent in March after increasing 1.0 percent in February. The gasoline index increased 3.9 percent in March, its largest increase since February 2013. (Before seasonal adjustment, gasoline prices rose 10.5 percent in March.) The fuel oil index also rose in March, increasing 5.9 percent. In contrast, the index for natural gas declined 2.7 percent, and the electricity index fell 1.1 percent. Over the past 12 months, the electricity index has increased 0.9 percent, while the other energy indexes have sharply declined. Despite the March increases, the gasoline index has fallen 29.2 percent over the last 12 months, and the index for fuel oil has decreased 24.9 percent. The index for natural gas has also declined over the span, falling 14.4 percent.
Ex food and energy monthly:
The index for all items less food and energy increased 0.2 percent in March. The shelter index increased 0.3 percent, with the indexes for rent and owners' equivalent rent both rising 0.3 percent and the index for lodging away from home increasing 0.4 percent. The medical care index, which was unchanged in February, rose 0.3 percent in March. The index for medical care services rose 0.4 percent, with the indexes for physicians' services and for hospital services both rising 0.6 percent after declining in February. The index for used cars and trucks increased 1.2 percent after rising 1.0 percent the previous month. The apparel index rose 0.5 percent in March, its third consecutive increase. Also rising in March were the indexes for new vehicles, for alcoholic beverages, and for household furnishings and operations, all of which increased 0.2 percent. The tobacco index rose 0.4 percent, and the index for recreation advanced 0.1 percent. The index for airline fares, in contrast, declined 1.7 percent in March after rising in February.
