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Core Services Highlights Above-Consensus CPI Print

DATA REACT

At 0.3385% unrounded, the core M/M US core CPI reading in March was a solid upside surprise vs 0.2% M/M expected.

  • At first glance, the most notable dynamic underlying this is a continued divergence between goods and services inflation over the past couple of months, which has handily seen services prices rise more quickly.
  • March saw another weak number for core goods (+0.080% M/M) but core services was very strong at +0.419%, led by Transportation services (+1.8% M/M). In fact that core services print was the 2nd highest going back to 2005. (July 2020 saw an 0.49% print).
  • The Transportation price surge is probably related to US consumers travelling much more now that lockdowns are easing and vaccines are becoming more prevalent - something several analysts flagged prior to the report.


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