JPMorgan Econ FI-May CPI to put a spring in Powell’s step-108681162

JPMORGANNorthAmericaEconomicResearch12June2024MayCPItoputaspringinPowell’sstepTheMayCPIwasverybenign.Theheadlineindexwasflat,atenthbelowEconomicandPolicyResearchexpectations,andtheyear-agoincreasetickeddownto3.3%.Thebiggernewswasintheex-foodandenergycorecategory,whichincreased0.2%,alsoatenthbelowMichaelFeroliexpectations,buttotwodecimalplacesthe0.16%increasewasthesoftestsinceAugust2021,takingtheyear-agodowntwo-tenthsto3.4%.Withinthecore(1-212)834-5523measure,theflatreadingincoregoodspricesandthe0.4%increaseinbothrentalmichael.e.feroli@jpmorgan.commeasureswaslittlechangedfromrecentmonths.However,thesupercoremeasureJPMorganChaseBankNA—coreservicesex-rent—wasflatlastmonth(-0.4%),thesoftestreadingsinceSeptember2021.Withinsupercorethemostconsequentialdevelopmentwasvehicleinsurance,whichdeclined0.1%lastmonth.IntheyearthroughApril,vehicleinsuranceaccountedforabouthalfofthe4.7%year-agoincreaseinthesupercoreindex,soifthisisthestartofanewtrendinvehicleinsurance,itwouldbeameaningfuldevelopmentforbothcoreandsupercoreCPI.VehicleinsuranceiscalculateddifferentlyinthePCEindex,butevensowearetrackingasoft0.13%increaseintheMaycorePCEindex,whichwouldbringtheyear-agogaindownfrom2.8%to2.6%.Thisestimatecouldchangeaftertomorrow’sPPIreport.FOMCmeetingsarehighlyregimentedgatherings.Evenso,themagnitudeofthismorning’ssurprise,comin...