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Sharper Progress Made On Dispersion Of Inflation Pressures

US DATA
  • After the November report only warranted mild hope of reduced breadth of inflationary pressures, December’s report showed a sharper improvement.
  • MNI calculates that the share of the entire, rather than just core, CPI basket seeing M/M inflation above 3% annualized in seasonally adjusted terms fell 7pps to 44%, the lowest since Jan’21 and close to the 39% averaged through 2019 (across 56 items predominantly at indent level four).
  • The share in excess of 5% also fell 8pps to 35%, albeit still above the 2019 average of 25%, whilst the share seeing deflation increased to 40%, above the 38% averaged through 2019.
  • The Cleveland Fed Median CPI revealed a similar trend, easing from 0.46% M/M to 0.38% M/M for its lowest monthly rate since Aug’21.

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