🚨 US CPI returns to the highest level since May 2023


📌 April CPI increased +3.8% YoY (higher than the forecast +3.7%) and surged compared to +3.3% last month.
Month-on-month, CPI +0.6% MoM, slightly lower than last month's +0.9% in March but still quite high compared to the average.
📌 Core CPI +2.8% YoY also higher than the forecast +2.7% (last month +2.6%).
Month-on-month, Core CPI +0.4% MoM, higher than the forecast +0.3% and double the +0.2% of March.
📌 It's no surprise that the largest contribution comes from energy. The BLS recorded energy prices up +3.8% MoM (gasoline 5.4%, electricity +2.1%, heating oil +5.8%).
Yearly, energy increased +17.9% YoY, with gasoline alone up 28.4% YoY.
📌 Services and housing also increased: Shelter +0.6% MoM, rent and owners’ equivalent rent both +0.5% MoM.
Inflation has spread beyond energy issues with very broad price pressures. The energy price shock has transmitted to transportation costs, food, and services.
📌 For the Fed, of course, this is terrible data. The headline CPI has returned close to 4%, while housing no longer slows down as expected. The market may still favor the story of cutting interest rates, but inflation does not support that.
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