Post-CPI Summary - October 18, 2016 -

Post-CPI Summary – October 18, 2016

Oct 18, 2016Jeremy ParkinsonFinance0

Below is a summary of my post-CPI tweets.

CPI coming up in 14 minutes. Consensus on core is for a barely 0.2% print, (more like 0.15%). That would keep the y/y barely at 2.3%.

Remember to join me at 9am for a (FREE) live interactive video event.

okay, core 0.1%, y/y to 2.2%. Yayy! And by the way, it was only 0.11% so not close. y/y to 2.21%.

core rate is only 1.8% over last 3 months, vs 2.0% over last 6 and 2.2% over last 9. November tightening is wholly out.

Housing accelerated, Medical care roughly unch. Educ/Communication dropped. Getting breakdown now.

Headline was also soft. Market was 241.475 bid before the number and 241.428 was the print. Still rounded to 0.3% m/m though.

Bonds don’t love this as much as I thought they would. 10y note up about 4 ticks after the data.

10y inflation swaps also didn’t do much. Close to 2% for first time in a long, long time.

Primary rents 3.70% from 3.78%, I was reading last month. But OER still up, 3.38% from 3.31%.

New and used cars -1.16% vs -0.95%, so more weakness there.

In Med care: Drugs 5.38% vs 4.59%, ouch. But prof svcs 3.22% vs 3.35%, and hospitals 5.64% vs 5.81%, and insurance 8.37% vs 9.10%.

But those are all retracements within trend.

Tuition ebbed to 2.32% vs 2.53%, and “information and info processing” -1.98% vs -0.90%. Those two add up to 7% of CPI.

I can see why bonds aren’t super excited. This isn’t a trend change. It looks like a pause.

ok, have to go get ready for the video event.

Probably good news from Median as well. I see 0.17%, bringing y/y down to 2.54% vs 2.61%. But hsg is median category so I may be off.

I covered some stuff in the Shindig event, but it’s worth showing a couple of charts. Here is health insurance. You can see the little drop this month isn’t exactly something that would make you say “whew! Glad that’s over!”

This next chart, also in medical care, is the year/year change in the cost of medicinal drugs (prescription and non-prescription). Also, not soothing. And these are where the important things are happening in CPI right now.