BLS data plus Mish forecastGaming the CPI Month-Over-MonthThe Bloomberg Econoday consensus is for the CPI to rise by 0.2 percent in July.I will take the under at 0.1 percent with a decent chance for lower depending on rent and owners’ equivalent rent (OER).OER is the price someone would pay to rent their own house if they rented instead of owning.Estimating Year-Over-Year for JulyFor every 0.1 percentage point above or below 0.2 percent for July, expect a corresponding move in the year-over-year report tomorrow.My estimate is 0.1 percent for July, thus a 2.9 percent year-over year number, down from 3.0 percent last month.Year-Over-Year Look Ahead

At the risk of looking silly, I suggest any surprises for those numbers to be to the downside.AdjustmentsMy forecast for August and September depends on being correct for July.For every 0.1 percentage point above or below 2.9 percent in July, adjust August and September up or down accordingly.The year-over-year reports for August and September will be very good regardless of what happens in July.Producer Price Index (PPI) Weaker than ExpectedEarlier today I commented Producer Price Index (PPI) Weaker than Expected, the Fed Will Be Pleased

The PPI rose 0.1 percent in July vs. a 0.2 percent Bloomberg Econoday expectation. The way the PPI outperformed will please the Fed.

Transitory PleasureThe Fed’s pleasure will be transitory as good CPI reports morph into a recession.For discussion, please see my August 2, 2024 post The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered.I did a follow-up post on August 9, Recession Debate: Citing the Sahm Rule, WSJ’s Greg Ip Says No RecessionGreg Ip says the conditions for recession are not in place. I disagree. And I show where and how he went wrong.More By This Author:Producer Price Index (PPI) Weaker Than Expected, The Fed Will Be Pleased Total Outstanding Mortgage Debt Increased 18.9 Percent In Three YearsCredit Card And Auto Loan Delinquencies Surge In The Second Quarter