Consumer Price Index:Historical Releases/2023 April

Return to: Consumer Price Index | Historical Releases

Full Report:https://www.bls.gov/news.release/pdf/cpi.pdf

Publishing date: May 10 2023

Assestment by Magaly

April CPI numbers showed first signs that Core CPI numbers could start to decline going forward. We can expect disinflation to continue as shelter CPI start to come down, base effects, and a maybe a more cooled labor market.

After CPI numbers, the market is now pricing an almost 100% possibility of a pause in rates in June.

Key Takeaways from April CPI numbers:

• Super core CPI had the lowest m/m increase in almost a year. The Y/Y rate continue to be high and sticky, but this could be taken as a positive first sign.
• Transportation continues to be the biggest contributor for supercore numbers, however april saw the first decline in transportation index since start of 2022.
• Excluding shelter and used cars from core CPI(which has lag effects in the data), most other important components saw a m/m decline

Summary

https://www.bls.gov/news.release/pdf/cpi.pdf

• U.S consumer price index rose 0.4% in April, in-line with estimates.
• Yearly, CPI rose 4.9%, the lowest level since April 2021 and below the 5.0% estimate.
• Core CPI rose 0.4% in April, unchanged from March and also in-line with estimates.
• Yearly, core CPI rose 5.5% versus 5.5% expected. -

Biggest Contributors

• Biggest positive contributors were in shelter(+0.4% m/m), gasoline(+3% m/m) and used vehicles(+4.4% m/m)

• Biggest negative contributors were fuel oil(-4.5% m/m), new vehicles(-0.2% m/m), food at home(-0.2% m/m), and transportation services (-0.2% m/m).

Categories watched by the FED

https://twitter.com/zerohedge/status/1656278914082152450/photo/1

• Core goods: 1.2% YoY (0.6% m/m)
• Core Services: 6.8% YoY (0.4% m/m)

• Shelter: 8.1% YoY (0.4% m/m)

• Services less shelter "super-core": 5.1% YoY (0.1% m/m)
  

  https://twitter.com/LizYoungStrat/status/1656281608020795393/photo/1

CPI expectations

April 2023 CPI is expected to remain flat, with core CPI numbers still above headline numbers. This could be due to the increased in energy and wages during april, and the housing and cars data lags.

Inflation numbers will continue to be high enough for the FED plan to keep rates high for longer, especially since their focus is on the core numbers.

Some developments during the month: (more details: Consumer Price Index)

• Wages increased 0.5% again during april to 4.4% Y/Y compare to 4.2% in March
• Energy prices had price increases during april. This could be reflected in higher energy CPI numbers.
• Food prices had an increase in april (0.6 percent), but is still down 19.7% Y/Y.
• Supply chain has normalized, and continue to fall below the index’s historical average in april.
• Housing prices increased 0.2% m/m in april, but it is now only 0.4% up y/y
• Used Car decreased 3% m/m and new cars remained flat. However April CPI data could start reflecting the increases seeing in Q1 2023 in used cars.

The markets are now pricing a pause in June meeting, with 80% probability.

Range:

• CPI: 4.9% - 5.1%
• Core CPI: 5.4% - 5.6%

Escenario	Market reaction	Probability by Magaly
If < 4.9%	3% rally	5%
Between 4.9% - 5%	1-2% Rally	15%
In line with expectations 5%	Flat	40%
Between 5% - 5.1%	1-2% drop	35%
if > 5.1%	4% drop	5%

Consensus forecast

Variable	Forecast	Previous	Actual	Market Reaction
Core CPI (MoM) (Apr)	0.40%	0.40%	0.40%	Flat
Core CPI (YoY) (Apr)	5.50%	5.60%	5.50%
CPI (MoM) (Apr)	0.40%	0.10%	0.40%
CPI (YoY) (Apr)	5.00%	5.00%	4.90%

FED Cleveland Forecast

	YoY Change		MoM Change
Month	CPI	Core CPI	CPI	Core CPI
Apr-23	5.19	5.56	0.61	0.46
May-23	4.41	5.39	0.22	0.45

Institutions Forecasts

INSTITUTION	FORECAST
JP MORGAN	4.90%
SCOTIABANK	4.90%
NOMURA	4.90%
BARCLAYS	5%
BLOOMBERG	5%
BANK OF AMERICA	5%
GURGAVIN CAPITAL	5%
CREDIT SUISSE	5%
HSBC	5%
TD SECURITIES	5%
UBS	5%
WELLS FARGO	5%
VISA	5.10%
GOLDMAN SACHS	5.10%
CIBC	5.10%
CITI	5.10%
MORGAN STANLE	5.10%
MEDIAN	5%