Core
Seen some say that ex-rent & OER the core was moderate, but not sure this is the case. Median CPI likely 0.40% and 16% trimmed likely 0.44%. Core ex-rent&OER was 0.26%, 3.1% SAAR. YoY rose to 2.3% vs a 2017-19 avg of 1.2%, so more than a full pp above pre-covid rate.
Domestic Airfare Growth Slows, Upside Remains Strong
Airfares were up 6.3% NSA (2.8% SA vs my 1.2% est). About 1.5pp of that includes baggage fees. Without those, fares were up closer to 5.0% NSA. That includes a surge in int'l fares and a much more subdued rise...
Cleveland Fed Warned Trimmed Mean Understates Inflation, Critics Ignored
The skew issue was pointed out by the Cleveland Fed back in early 2022 as a reason the trimmed mean was understating inflation back then. Someone wanting the top job who is trashing current measures & methods probably should have...
BEA's Next Move: Legal Services CPI Drop vs PPI
There was a large fall in CPI legal services. Now the question is whether BEA will use this in the PCE, where it would cut about-3.5bps from the core rate, or whether they will use the PPI (which they prob...
Tariffs Account for Full Core Goods Inflation, Adding 0.8%
Will just say, this is about 3x the 0.3pp estimate that some Fed officials, including Gov Waller, had in the summer of 2025.
BEA's Data Switch Trims Core PCE by 8bps
The BEA’s decision to change legal services source data in the PCE from CPI (around 11.3% in Jan) to PPI (1.8% in Jan) cut the core PCE MoM chg by 8bps (would have been 0.44% vs 0.36%). Could defend...
BEA Methodology Trimmed Core PCE, Still 0.4%
It missed b/c of a methodological change that the BEA introduced today that cut the core PCE by about a tenth relative to expectations. And even then, it still rounded to 0.4%.
Core Auto Inflation Hits Fastest Rate in 12 Years
The peak for the PCE's core goods x-autos series was 5.3% YoY in 2022. We're not there , but it will jump from 2.3% in Jan26 to 2.9% in Feb26 tks to a 1.0% MoM surge. Outside of covid, it's...
Core CPI‑PCE Spread Set to Hit -65bps, Third Largest
Tmrw, we'll see the YoY core CPI vs YoY core PCE spread widen to around -65bps, which would be the 3rd largest in four decades. Shelter cooling helped to narrow the spread over the last 18m to about +20bps in...
Core PCE Outpaces CPI Due to Weighting Differences
We still need Feb PPI , but Feb core PCE looks much stronger than Feb core CPI. On Friday, Jan core PCE will also be stronger than Jan core CPI. This is not shelter. Instead, it reflects the differences in...
Birth‑Death Model Shifts Jobs, Not Causes Payroll Miss
The birth-death model added -46k fewer jobs to the NSA tally this Feb vs last Feb, but it also added +44k to Jan26 vs Jan25. It just shifted around job growth in the first 2 months. Blaming B/D for the...
ISM Prices Hit 70.5, Steel and Aluminum Costs Surge
ISM prices surged by 11.5 pts to 70.5, highest since Jun 2022. ISM said higher px for steel & alumin drove px index. That is unsurprising & has been evident in PPI data since Liberation Day. For manufacturers, the cost...
Physician and Insurance Shifts May Lift Core PCE Above 0.5%
For PPI, will be curious to see if we get the potential upside risk from offices of physicians (near-record jump in Medicare reimbursement rates of >3% could boost this item) & health insurance (expiration of ACA subsidies). IF those materialize,...