Consumer Price Index:Historical Releases/2023 December

Return to: Consumer Price Index | Historical Releases | Consumer Price Index:Historical Releases/2023 October

Full Report: https://www.bls.gov/news.release/archives/cpi_01112024.htm

Publishing date: January 11, 2024.

Summary

Variable	Forecast	Previous	Actual
Core CPI (MoM)	0.3%	0.3%	0.3%
Core CPI (YoY)	3.8%	4.0%	3.9%
CPI (MoM)	0.2%	0.1%	0.3%
CPI (YoY)	3.2%	3.1%	3.4%

• CPI rose 0.3% in December, up from 0.1% in November and above 0.2% estimate.
• Yearly, CPI rose 3.4% on the month, up from 3.1% in November and higher than 3.2% estimate.
• Core CPI rose 0.3% in December, unchanged from November’s figure and in-line with the estimate.
• Yearly, core CPI rose 3.9% lower than 4.0% in November and higher than 3.8% estimate.
• Shelter rose 0.5% on the month (November:+0.4%) and was responsible for more than half of the monthly headline increase.
• Energy prices were up 0.4% in December after being down for two consecutive months.
• Supercore inflation was up by 3.9% on a yearly basis, same as in November but rose 0.4% on the month down from 0.44%.

Contributors

https://twitter.com/M_McDonough/status/1625489276720021504/photo/1

• The shelter index increased 0.5 percent in December, after rising 0.4 percent the previous month, and was the largest factor in the monthly increase
• The motor vehicle insurance index increased 1.5 percent in December, after increasing 1.0 percent the preceding month.
• The used cars and trucks index rose 0.5 percent over the month, after rising 1.6 percent in November. Among other indexes that rose in December were recreation, new vehicles, education, and airline fares.
• The index for household furnishings and operations fell 0.4 percent in December, the same decrease as in November. The personal care index also decreased, falling 0.3 percent over the month.

Categories watched by the FED

Index	M/M	Y/Y	Prev. M/M	Prev. Y/Y
Core Goods	0.0%	0.2%	-0.3%	0.0%
Core Services	0.4%	5.3%	0.5%	5.5%
Shelter	0.5%	6.2%	0.4%	6.5%
Services less shelter "super-core"	0.4%	3.9%	0.44%	3.87%

CPI expectations

Forecasts expect the December CPI to show that the headline index remain aroung the same level from 3.1 in november to 3.2%They see core CPI up 0.3%, lowering the y/y rate to 3.8%.

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

• We saw wages again surprising to the upside, increasing the y/y rate to 4.1% from 4%
• Energy prices continued to decline during december. Oil ended the year -6% and gasoline -2.37%.
• Food prices decline 1.8% during december, ending the year 13.7% down.
• Supply chain index decreased during december again, but remains stable. We have to keep monitoring the current increase in shipping rates, since it can have an impact on inflation later on.
• Housing prices recorded a 9th consecutive month of price increases, increasing 0.17% month-over-month in october of 2023 (4.7% y/y). However, rents are down 0.8% month-over-month, down 1% year-over-year.
• Used car prices continues with its donward pressure on prices, ending 2023 -7.0%, and -21% from the peak. New car prices are still only midly down from peak.

The markets are rate cuts starting on March and 6 in total in 2024

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html

Range:

• CPI: 3.0% - 3.4%
• Core CPI: 3.8% - 4.0%

Escenario	Market reaction	Probability by Magaly
CPI below 3.0%	2%+ rally	5%
CPI at 3.0-3.1%%	1% Rally	10%
CPI in line with expectations	Flat	50%
CPI 3.3%	1-2% drop	30%
CPI above 3.3%	3% drop	5%

Consensus forecast

Variable	Forecast	Previous	Actual	Market Reaction
Core CPI (MoM)	0.3%	0.3%
Core CPI (YoY)	3.8%	4.0%
CPI (MoM)	0.2%	0.1%
CPI (YoY)	3.2%	3.1%

FED Cleveland Forecast

	YoY Change		MoM Change
Month	CPI	Core CPI	CPI	Core CPI
Dec 2023	3.32%	3.93%	0.3%	0.33%
Jan 2024	2.94%	3.8%	0.19%	0.32%

Individual Institutions

https://twitter.com/NickTimiraos/status/1745075519199351053/photo/1