US DATA
US import prices ticked up 0.1% M/M in November, above the -0.2% expected but largely offset by a 0.2pp downward revision to October (to 0.1%). Ex-petroleum, prices rose 0.2%, same as prior (unrounded, it was 0.16% for the 2nd consecutive month - 0.0% had been expected).
- These are all expressed on a non-seasonally adjusted basis, though, so the more important metric from an analytical perspective is Y/Y - the 2.1% rise in ex-petroleum prices vs Nov 2023 was a slight deceleration vs 2.2% in October, but that means that core import inflation has exceeded 2% Y/Y for two consecutive months, the first time since Nov-Dec 2022.
- As the upside surprise in November Core Goods CPI reminded, the disinflationary effect of the goods category is dissipating.
- Core PPI has shown waning momentum on a 6-month annualized basis but Y/y remains stubbornly above 3%, and core import prices have picked up sharply from a deflationary period in 2023-early 2024.
- The key element from this report for core PCE is import air passenger fares: these fell 4.8% M/M in November on a non-seasonally adjusted basis, which should translate into a soft print when the BEA seasonally adjusts it (see chart - this is the lowest M/M November print since at least 2018).
- November Core PCE expectations following CPI/PPI centered around 0.13-0.14% M/M, and we would expect little change after today's data, with perhaps a slight downside bias.
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