The Observatory is our real-time monitoring of the US economy. It offers a regular systematic dissection of virtually every major fundamental macro data set released in the US. We scan the time-series characteristics, sectoral decompositions, macro-cycle implications, and the effects on GDP and inflation of each release, with an understanding of the nuances and specific manipulations required for each data series. The Observatory seeks to paint a moving picture of the economic cycle, print by print.
We share our latest note from The Observatory: CPI Inflation Monitor.
Synthesis: The latest CPI data offered little new information, simply confirming that inflationary pressures remain persistent. While core CPI offered some reprieve, with used vehicles weighing on the measure. With nominal motor vehicle sales running steady and the US remaining in a secular automobile shortage, we don’t expect transportation to be a consistent downward pressure on inflation. Finally, regardless of the marginal changes here, inflation remains very far from the Fed’s objectives, keeping us on the path to a hiking cycle.
Read all the data driving this assessment below:
Until next time.