US December monthly consumer sentiment up: -0.1% to 0.1%.. Based on updated adjustment factors, the US Bureau of Labor Statistics reported on Friday that the monthly Consumer Price Index (CPI) for Dec had been adjusted from -0.1% to +0.1%.
US December Core CPI, which excludes volatile food and energy costs, was revised higher for the same period, going from +0.3% to +0.4%.
US December CPI Market response
In the wake of this decision, the US dollar maintains its power. The US Dollar Index was up 0.2% on a daily basis, and was traded at 103.40
US December Consumer Sentiment Review
The monthly average Consumer Price Index for All Urban Consumers fell % in December while increasing 6.5 % over the previous 12 months. In December (SA), the index for all products except food and energy climbed by 0.3%, rising by 5.7% from the previous year.
Despite a lowering inflation rate, major factors are still rising.
Consumers are paying less to fill up the tank, as the price of gasoline fell by a seasonally adjusted 9.4% in December. This is the key driver of the 0.1% drop in CPI for the month. For the year, gasoline is down 1.5%. The national average price of a gallon of gas hit $3.26 as of January 9, 2023
Core inflation is driven up by the rising cost of housing.
The cost of housing increased by 0.8% in December, contributing significantly to the 0.3% increase in core inflation. As the price of housing and other non-discretionary products rises, Americans, especially people with limited incomes, are realizing that their wallets are getting thinner.
Three of the 6 major food groups had price increase in December, which resulted in a percent increase in the cost of groceries. In comparison to December 2015, food prices increased by 10.4%. Electricity and natural gas prices all indicated rises in Dec and double-digit rises overall. The classifications have increased 19.3% and 14.3% on yearly basis.
Some positives
Used automobile and truck prices are generally declining. The category’s price dropped 2.5% in December, marking its sixth straight reduction. In comparison to November, airline ticket prices are down 3.1% month over month.
While the unemployment rate is still quite low at 3.5%, headline inflation has decreased by over 2 percentage points. This appears to be reinforcing the notion of a “soft landing,” especially when combined with China’s abrupt reopening.
Source: Haver Analytics. Data as of January 11, 2022.
