Today's December CPI report tracked estimates
Today's December CPI report tracked estimates with a -0.1% headline that rounded from -0.057%, and a 0.2% core increase that rounded from a firm 0.210%. The y/y increase of 1.9% in headline CPI slowed from 2.2% in November and was the first sub-2% reading since August 2017. The 2.2% core reading matched the November rise. The core gains have firmed over the last two months averaging 0.204%, but lower over the past six months at 0.176%. Analysts expect a 0.1% January CPI reading for the headline and a 0.2% rise in the core with a -1% energy reading that should leave a 1.4% y/y headline rise and a core gain of 2.0% y/y. The data have tracked the pull-back in headline y/y inflation due to easy comparisons, while the oil price plunge has depressed the inflation metrics into 2019. Analysts expect a -0.1% December headline PCE chain price reading and a 0.2% gain for the core that matches the CPI mix, which would leave the headline December y/y chain price gain falling to 1.6% from 1.8%, before an expected further drop to the 1.4% area in January.