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03 16 2016 | by Victor Xing | Economics

February CPI: the rise of core inflation

February CPI beat market expectations as core components rose at a rate of 0.3% MoM vs. 0.2% consensus.  Headline CPI remained weighed down by energy prices to print -0.2% MoM vs. -0.3% expectation.  It is worth noting that the rebound in apparel (sensitive to dollar vs. renminbi valuation) came despite further declines in China import prices, and stronger readings in medical care inflation may signal dissipating distortions related to the Affordable Care Act.

Additionally, this data print is available to FED policymakers in their second day of March policy deliberation, and it would likely give another boost to officials concerned about steady underlying inflation growth being masked by the Great Global Energy Rout.

CPI on a month-over-month basis:

  • Headline CPI at -0.168% MoM vs. -0.3% consensus and 0.028% prior
  • Core CPI at 0.283% MoM vs. 0.2% expectations and 0.293% prior
  • Owner equivalent rent (OER) at 0.253% MoM vs. 0.246% prior
  • Medical care at 0.510% MoM vs. 0.483% prior
  • Apparel at 1.62% MoM vs. 0.579% prior
  • New vehicles at 0.229% MoM vs. 0.299% prior
February CPI
Energy prices continue to weigh on the broader inflation index, but core inflation rose again amid an upward spike in apparel

CPI on a year-over-year basis:

  • Headline CPI at 0.974% YoY vs. 1.342% prior
  • Core CPI at 2.339% YoY vs. 2.216% prior
  • OER at 3.158% YoY vs. 3.158% prior
  • Medical care at 3.503% YoY vs. 2.992% prior
  • Apparel at 0.862% YoY vs. -0.627% prior
  • New vehicles at 0.627% YoY vs. 0.613% prior

February CPI

Apparel, medical care, OER, and new vehicles all rose in February to boost gains in core CPI

The strong apparel inflation came despite soft import prices from China

February CPI
Import prices from China declined further in February

Next article03 11 2016 | by Victor Xing | Central Banks

FED communication and market recap ahead of March FOMC