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Energy Drives Headline Rate Higher As Expected

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As expected, the increase in the headline rate was driven by a sequential rise in electricity and fuel costs, which rose +6.3% M/M NSA, bringing the annual rate to -8.8% Y/Y (from -35.3% prior).

  • Within core goods, clothing and footwear saw seasonal price falls of -7.6% M/M NSA, but the annual rate was steady at +6.0% Y/Y.
  • Of services components, rents rose +2.1% M/M NSA, implying an annual rate of +5.0% Y/Y (vs +4.4% prior). Otherwise, both the recreation and culture and restaurant and hotels components softened in January - deflating on the month and disinflating on an annual basis. Package holidays fell -12.6% M/M NSA, but the annual rate remains high at +19.1% Y/Y (vs +19.4% prior).
  • Analysts had noted that the January CPIF re-weighting added two-way uncertainty to today's print. Statistics Sweden estimate that the "contribution of the basket effect on the monthly change in the CPI was -0.25 percent". This aligns with Nordea's view coming into the release.
  • From a first glance, the energy components have been assigned a higher weight in 2024 (electricity and fuels increases to 55 parts per 1000 from 42 parts prior), offset by lower weights for core goods and services. Package holidays' weight declines to 6 parts per 1000 from 9 parts.
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As expected, the increase in the headline rate was driven by a sequential rise in electricity and fuel costs, which rose +6.3% M/M NSA, bringing the annual rate to -8.8% Y/Y (from -35.3% prior).

  • Within core goods, clothing and footwear saw seasonal price falls of -7.6% M/M NSA, but the annual rate was steady at +6.0% Y/Y.
  • Of services components, rents rose +2.1% M/M NSA, implying an annual rate of +5.0% Y/Y (vs +4.4% prior). Otherwise, both the recreation and culture and restaurant and hotels components softened in January - deflating on the month and disinflating on an annual basis. Package holidays fell -12.6% M/M NSA, but the annual rate remains high at +19.1% Y/Y (vs +19.4% prior).
  • Analysts had noted that the January CPIF re-weighting added two-way uncertainty to today's print. Statistics Sweden estimate that the "contribution of the basket effect on the monthly change in the CPI was -0.25 percent". This aligns with Nordea's view coming into the release.
  • From a first glance, the energy components have been assigned a higher weight in 2024 (electricity and fuels increases to 55 parts per 1000 from 42 parts prior), offset by lower weights for core goods and services. Package holidays' weight declines to 6 parts per 1000 from 9 parts.