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Core CPI Goods Preview: Mixed, With Stronger Cars But Weaker Elsewhere?

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  • Including last month’s annual revisions, one of the main sequential developments was a bounce back in core goods prices, ticking back into positive territory after prior months of deflation were revised smaller than first thought.
  • The increase in January was led by non-used cars prices as the latter continued to fall heavily although we could see the opposite this time.
  • A variety of analysts forecast a bounce or at least a pause in used car prices after three months of nearly -2% declines, in part after Manheim prices have now increased 7.5% since November's recent lows.
  • The Fed, however, is more likely focused on broader price pressures within the core goods category. Here, February’s notable step lower in the NY Fed’s global supply chain pressures index to hit levels consistent with pre-pandemic levels would imply at least some downward pressure on goods prices.


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