U.S Core CPI Posts Largest Increase in 11-Months

U.S headline inflation was muted as expected last month (+0.1% vs. +0.1%e m/m), but there was movement in the closely watched underlying measure.

Core-CPI prices, ex-food and energy, increased a seasonally adjusted +0.3% in December from a month earlier, the largest increase since January 2017.

Digging deeper, the gain in core-prices can be attributed largely to shelter inflation, which had been slowing over the past year but rose +0.4% in December. Besides shelter, the indexes for medical care, used cars and trucks, and new vehicles all contributed to the rise in core prices. The index for prescription drugs, which had weakened earlier this year, rose 1% in December on the back of a 0.6% increase in November.

Note: Shelter accounts for about a third of the overall consumer price index.

U.S Retail sales ends last year on solid footing

U.S retail stores, restaurants and online-shopping platforms closed out December on a strong note.

Data this morning showed that U.S retail and food services sales rose a seasonally adjusted +0.4% in December from the prior month, the fourth straight increase. Ex-autos and gas, sales also rose +0.4% in November.

Total sales in Q4 were up +5.5% from the same period a year earlier. For 2017 as a whole, overall sales rose +4.2% from the prior year, the strongest annual growth in three years.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell