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Consumer Price Index: Difference between revisions
→Near-term inflation drivers
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The Housing CPI lags, and the fact the wages are still above average could keep inflation above the 2% target for a while. | The Housing CPI lags, and the fact the wages are still above average could keep inflation above the 2% target for a while. | ||
The energy market, which saw an increase in CPI in January, stabilized during February 2023, | The energy market, which saw an increase in CPI in January, stabilized during February 2023, the price increases were smaller | ||
The used car prices saw a big jump in prices since January 2023, this could put upward pressure on CPI this month, but could be a limited effect since new car prices instead are falling, | The used car prices saw a big jump in prices since January 2023, this could put upward pressure on CPI this month, but could be a limited effect since new car prices instead are falling, | ||
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*The S&P/Case-Shiller Home Price Index in the United States decreased 0.9% month-over-month in December of 2022, marking a sixth consecutive month of declines in house prices. However YoY, is still positive at 4.6%. | *The S&P/Case-Shiller Home Price Index in the United States decreased 0.9% month-over-month in December of 2022, marking a sixth consecutive month of declines in house prices. However YoY, is still positive at 4.6%. | ||
===5. Energy=== | === 5. Food Prices === | ||
* The '''FAO Food Price Index*''' (FFPI) averaged 129.8 points in February 2023, marginally down (0.6 percent) from January, continuing the downward trend for the eleventh consecutive month.<ref>https://www.fao.org/worldfoodsituation/foodpricesindex/en/</ref> | |||
* With the latest decline, the index has fallen 29.9 points (18.7 percent) from the peak it reached in March 2022. | |||
===6. Energy=== | |||
*Oil prices have come down significantly since the peak to around $76, below pre-war levels<ref name=":0">https://oilprice.com/oil-price-charts/45</ref>. Prices increased in January 2023 from 75 to 77, a small increase. | *Oil prices have come down significantly since the peak to around $76, below pre-war levels<ref name=":0">https://oilprice.com/oil-price-charts/45</ref>. Prices increased in January 2023 from 75 to 77, a small increase. | ||
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[[File:FjjZBKRWIAITa5Y.png|thumb|https://twitter.com/MacroAlf/status/1601366332527693824/photo/1]] | [[File:FjjZBKRWIAITa5Y.png|thumb|https://twitter.com/MacroAlf/status/1601366332527693824/photo/1]] | ||
=== | ===7. Car Prices=== | ||
*Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) increased 4.3% in February from January. This was the largest increase for the full month of February since 2009’s 4.4% rise. <ref>https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html</ref> This recent increase could create upward pressure on inflation short term. | *Wholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) increased 4.3% in February from January. This was the largest increase for the full month of February since 2009’s 4.4% rise. <ref>https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html</ref> This recent increase could create upward pressure on inflation short term. | ||
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*JPM research expects prices to decline by 2.5% to 5% for new cars and by 10% to 20% for used cars in 2023.<ref>https://www.jpmorgan.com/insights/research/when-will-car-prices-drop#:~:text=Average%20prices%20were%20up%2042.5,to%2020%25%20for%20used%20cars.</ref> | *JPM research expects prices to decline by 2.5% to 5% for new cars and by 10% to 20% for used cars in 2023.<ref>https://www.jpmorgan.com/insights/research/when-will-car-prices-drop#:~:text=Average%20prices%20were%20up%2042.5,to%2020%25%20for%20used%20cars.</ref> | ||
=== | ===8. Lower demand=== | ||
The slowing in demand the economy has started to experience will help put downside pressure on prices. The pricing power companies experienced during 2022 will diminish as demand declines, especially on discretionary items. | The slowing in demand the economy has started to experience will help put downside pressure on prices. The pricing power companies experienced during 2022 will diminish as demand declines, especially on discretionary items. | ||