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“Supercore” CPI Weighed Down By Surprise Hit From Lodging Away From Home

  • Core services ex OER & primary rents: 0.22% M/M in Oct vs limited analyst expectations of 0.46% (range 0.4-0.54) after 0.61% M/M in Sep.
  • It sees the three-month rate tick up just a tenth to 4.8% annualized, whilst the six-month increases two tenths to 3.2% annualized. Some typical drivers:
  • Lodging away from home: heavy driver of the downward surprise here, -2.45% M/M vs analyst average +1.7% (range -0.4 to +3.0) after a strong 3.7%.
  • Airfares: as expected -0.9% M/M vs analyst average -1.1% (range -3% to +0.6%) after 0.3%.
  • Health insurance update looks about as expected: +1.1% M/M NSA vs some analyst estimates seen between 0.5-1.5% M/M. It follows an average -3.8% M/M through Oct’22-Sep’23 for an average drag of core CPI of -3bps and supercore CPI of -11bps as its relative important declined over the period. The 2bp contribution on the month (take with caution as NSA data) provided a relative swing of 13bps for supercore CPI vs the 11bps drag averaged over the past twelve months.

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