24 Mar 2015
US inflation out of negative territory – KBC
FXStreet (Barcelona) - US CPI inflation picked up to 0.0%yoy after diving into negative territory in January, while core inflation picked up to 1.7% yoy, slowly moving towards the Fed’s 2% target, notes the Research Team at KBC Bank.
Key Quotes
“After having dropped into negative territory in January, US CPI inflation picked up to 0.0% Y/Y in February. The outcome was slightly above the market consensus, which was looking for a stabilization at ‐0.1% Y/Y.”
“On a monthly basis, CPI rose by 0.2% M/M, in line with expectations. The details show that upward price pressures were led by goods (0.4% M/M), partly due to a limited rebound in energy prices (1.0% M/M). In the services sector, CPI rose by 0.1% M/M, led by transportation (0.8% M/M). Also prices of housing (0.2% M/M), apparel (0.3% M/M) and food & beverages (0.1% M/M) increased in February, while prices of education & communication (‐0.1% M/M) and personal computers (‐0.4% M/M) dropped.”
“Core inflation, which excludes food and energy prices, rose by 0.2% M/M with the annual rate picking up from 1.6% Y/Y to 1.7% Y/Y.”
“Today’s US inflation data suggest that the sharp drop in inflation of the previous months, due to the lower oil price, will probably be transitory.”
“Core inflation picked up to 1.7% Y/Y, only slightly below the Fed’s 2% target. Although we might see some second‐round effects from the lower oil price and the strong dollar will weigh on inflation, we believe that inflation is likely to slowly return back to the Fed’s 2% target.”
Key Quotes
“After having dropped into negative territory in January, US CPI inflation picked up to 0.0% Y/Y in February. The outcome was slightly above the market consensus, which was looking for a stabilization at ‐0.1% Y/Y.”
“On a monthly basis, CPI rose by 0.2% M/M, in line with expectations. The details show that upward price pressures were led by goods (0.4% M/M), partly due to a limited rebound in energy prices (1.0% M/M). In the services sector, CPI rose by 0.1% M/M, led by transportation (0.8% M/M). Also prices of housing (0.2% M/M), apparel (0.3% M/M) and food & beverages (0.1% M/M) increased in February, while prices of education & communication (‐0.1% M/M) and personal computers (‐0.4% M/M) dropped.”
“Core inflation, which excludes food and energy prices, rose by 0.2% M/M with the annual rate picking up from 1.6% Y/Y to 1.7% Y/Y.”
“Today’s US inflation data suggest that the sharp drop in inflation of the previous months, due to the lower oil price, will probably be transitory.”
“Core inflation picked up to 1.7% Y/Y, only slightly below the Fed’s 2% target. Although we might see some second‐round effects from the lower oil price and the strong dollar will weigh on inflation, we believe that inflation is likely to slowly return back to the Fed’s 2% target.”