This morning’s Consumer Price Index shows prices having risen 0.3% last month, which is 0.1% lower than the 0.4% increase anticipated. The headline year-over-year number dropped to 3.4% while the ex-food-and-energy Core reading dropped 0.2% to an annual 3.6% increase.
One of the biggest offender to rising consumer prices is auto insurance, which has jumped 23% from this time 12 months ago. Housing costs are up 5.4% and that makes up 45% of the CPI index. So for the overall YOY number to be shrinking, that means that prices of other goods and services are well under the 3.6% reported Index.
Retail sales were flat, while a +0.4% increase was expected. If autos and fuel are removed from the equation, which gives you Core Retail Sales, the number actually turns negative by 1/10%.
Mortgage Rates LOVE the news of disinflation. MBS pricing jumped above the 50 and 100 day moving averages, and wipe out all the bad juju from last month’s PPI/CPI/Retail Sales reports on April 10, both shown in the purple circles in the graph below.
BT
