US DATA
With PCE using airfares and car insurance from the PPI report rather than the CPI report, it isn't quite as benign an inflation print as suggested on the surface, at least from the perspective of the Fed's preferred PCE price gauge.
- More mixed than airfares/insurance in CPI are parts of some key PCE inflation components including healthcare services that draw in part from the CPI report, including dental services (stronger, at -0.1% after -0.6%) and hospital services (weaker, at 0.1% from 0.9% prior).
- Overall the weightings and contributing categories from CPI suggest that core PCE will tilt more closely to 0.3% than to 0.2% (consensus coming into CPI was 0.24%), but we await PPI for the details including volatile categories that have no equivalent in CPI such as portfolio management.
128 words