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Consumer Price Index: Difference between revisions
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== Near-term inflation drivers == | == Near-term inflation drivers == | ||
Near-term inflation | Near-term inflation is still in line with a continued decline in inflation in the coming months. | ||
Housing CPI lags, and wages still above average could keep inflation above the 2% target for a while. | |||
=== | Important to consider that the housing market, auto market, and energy market have all stabilized during January 2023, and even saw an increase in prices. If this continues in coming months, we could experience a new wave of upwards price pressures in CPI. | ||
Another significant risk to the upside in short term will be China's reopening, especially on energy and other commodity prices. | |||
=== . Wages === | |||
The labor market is still resilient, and wages are still above average, due to this we can still expect pressure to the upside in CPI in the coming months, especially in the service sector.<ref>https://tradingeconomics.com/united-states/wage-growth#:~:text=Wage%20Growth%20in%20the%20United,percent%20in%20March%20of%202009</ref> | The labor market is still resilient, and wages are still above average, due to this we can still expect pressure to the upside in CPI in the coming months, especially in the service sector.<ref>https://tradingeconomics.com/united-states/wage-growth#:~:text=Wage%20Growth%20in%20the%20United,percent%20in%20March%20of%202009</ref> | ||
* However, the trend has been slowing recently, recent labor data shows average hourly earnings | * However, the trend has been slowing recently, recent labor data shows average hourly earnings increased by 4.4% from a year earlier in January of 2023, after an upwardly revised 4.8% rise in the prior month and slightly above market estimates of 4.3%. It was the smallest annual growth in average hourly earnings since August of 2021. <ref>https://tradingeconomics.com/united-states/average-hourly-earnings-yoy</ref> | ||
=== 2. Supply chain issues === | === 2. Supply chain issues === | ||