March 14, 2023 16:00 GMT
Inflation Dispersion Shows Little Recent Disinflationary Progress
- Broadly corroborating the underlying strength implied by the regional Fed alternate CPI measures, we estimate that the January spike in the breadth of inflationary pressure within the overall CPI basket was unwound yet nevertheless there remains little recent disinflationary progress.
- By our calculations, 56% of the basket increased by more than 3% annualized, down from 70% in Jan but close to the 58% in Q4. Importantly, those shares are little different for those in excess of 5% annualized, with 51% in Feb vs 61% in Jan and 53% averaged in Q4.
- The share seeing outright deflation has also narrowed, at 23% in Feb from 25% in Jan and 29% in Q4.
- This approach looks at 57 items across CPI, predominantly from indent level 4.