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Surprising Rise In Core Goods CPI Offsets Services Pullback

US DATA
Energy BulletsCommodities

The table in the image below provides a breakdown of core goods vs services and their contribution to core CPI in February.

  • Services as usual drove the strength in the core CPI reading overall: core services rose 0.46% M/M, vs 0.66% in Jan., though that was a little below the 0.51% consensus we'd gathered from sell-side reports.
  • However, core goods posted the first positive reading since May 2023 at +0.11% (-0.32% prior). That was an upside surprise vs consensus of -0.10%.
  • A few surprises in the breakdown: used vehicle prices rose 0.52% vs consensus -1.1% (and -3.4% prior), helping drive the core goods beat; OER and Rents came in roughly in line with expectations (0.44% vs roughly 0.47% expected for OER; 0.42% vs roughly 0.40% expected for rents).
  • In more volatile categories, Lodging was on the soft side at 0.20% (around 1.0% expected), with airfares above expected at 3.6% (also around 1.0% expected).
  • Medical care prices fell for the first time since August 2023.

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The table in the image below provides a breakdown of core goods vs services and their contribution to core CPI in February.

  • Services as usual drove the strength in the core CPI reading overall: core services rose 0.46% M/M, vs 0.66% in Jan., though that was a little below the 0.51% consensus we'd gathered from sell-side reports.
  • However, core goods posted the first positive reading since May 2023 at +0.11% (-0.32% prior). That was an upside surprise vs consensus of -0.10%.
  • A few surprises in the breakdown: used vehicle prices rose 0.52% vs consensus -1.1% (and -3.4% prior), helping drive the core goods beat; OER and Rents came in roughly in line with expectations (0.44% vs roughly 0.47% expected for OER; 0.42% vs roughly 0.40% expected for rents).
  • In more volatile categories, Lodging was on the soft side at 0.20% (around 1.0% expected), with airfares above expected at 3.6% (also around 1.0% expected).
  • Medical care prices fell for the first time since August 2023.