Economic Data Report
Inflation Proving Tough to Control
- 3.2% YOY came in higher than expected
- “Core” inflation continues to improve
- Overall inflation proving somewhat “sticky”
- Results may put off rate cuts a few more months
US Inflation (CPI) – Not There Yet
The “all items” CPI index came in at 3.2% for the 12 months ending in February. Inflation remains substantially above the Fed’s target rate of 2%, and this report was a reminder that the problem of rising prices may not be as easily or quickly resolved as many had hoped. Sixty percent of the monthly increase was in gasoline and housing. The broad index has not found a new low since last summer. The “core” index (all items less food and energy) was up 3.8% but continues to show gradual improvement. Inflation is proving to be a bit stickier than expected here. The last few percentage points may be tougher to quell than had been estimated earlier this year. The overall picture is one of gradual improvement, but nothing in this report would cause the Fed to cut rates any earlier than this summer.
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This information is for informational purposes only and does not constitute investment advice.
Sources:
GDP – Bureau of Economic Analysis
Employment & Inflation – Bureau of Labor Statistics
Interest Rates – Federal Reserve
P/E S&P 500 – multpl.com
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