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Contributions To Core CPI: Few Nasty Surprises


The table in the image below shows how the contributions to October's 0.23% M/M core CPI reading break down by major category: note the outsized contribution by car insurance (+0.07pp), and drag from lodging away from home (-0.04pp).

  • Part of the story of October's miss is that those two offset each other, and various other volatile categories were fairly tame including airfares and apparel. Housing ex-lodging pulled back to contribute 0.18pp, vs 0.23pp prior.
  • As noted, used cars pulling down core by -0.03pp -less than the -0.09pp in Sept - was if anything marginally more of a downside drag than expected but in the middle of a broad range of analyst expectations. New vehicles brought a slight downside surprise but made no net contribution (vs +0.02pp prior).
  • The health insurance gains - one of the biggest wild cards in this data release - were basically in line, so no surprises there.
  • In other words, fewer "nasty" surprises from outlying categories, with most of the major core services categories pulling back from September.

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