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On Wednesday, the U. S. economic scene will witness the latest release of the Consumer Price Index, CPI, for October. This data is awaited by investors and traders, as the Federal Reserve dovish tone spurred a selloff in the bond market, while US Treasury yields fall.
CPI is unlikely to offer much of a amnesty on the inflation front. Forecasts orbit around 0.6% month-over-month increase on the headline index and a monthly increase of 0.4% on the core index.
If realized, this would put headline CPI inflation at 5.9% year-over-year and core CPI inflation a bit lower at 4.4% year-over-year.”
A key question for the inflation profile is the extent to which some price growth in certain sectors coming back down to Earth, such as new and used vehicles, will counterbalance a broadening out of inflation in other areas, such as housing.
Goods inflation has been running at rates not seen in decades, while services inflation has mostly been in line with its historical average.
Goods inflation is also expected to hand the stick to services over the course of the next year, but all signs indicate that supply chain bottlenecks will maintain fanning the flames on inflation in the near term.
On Tuesday, the US economic data unveiled the Producer Price Index (PPI) for October, which in its headline expanded by 0.6%, higher than the 0.5% as per the expected estimates.
On a year-over-year figure, the PPI increased 8.6%, in line with the forecast. Additionally, the Core PPI for the same period on a monthly basis rose by 0.4%, a tad higher than expected, whereas the annual basis number came in line with estimations at 6.8%.
The report released by the Bureau of Labor Statistics noted that higher energy costs drove the gain on wholesale prices.
It also mentioned how recent months, transportation bottlenecks, material shortages, and increasing labor costs sent prices surging across the U. S. economy.
