Free Trial

US DATA: Housing Ticks Up, But Supercore Weighed By Volatile Category Downside

US DATA

For services, core was exactly as expected at 0.35%, and basically unchanged from September (0.35%). However, supercore (core services ex housing) came in on the soft side at 0.31% vs 0.39% expected, 0.40% prior. The key factors that help explain the in-line services but the softer supercore:

  • Owners' Equivalent Rents and Primary Rents came in above expected, at 0.40% (0.33% expected, 0.33% prior) and 0.30% (0.28% expected, 0.28% prior) respectively. The magnitude of these surprises is not significant although overall it seems these categories are steadying out in the 0.3-0.4% M/M area.
  • The supercore softness was largely down to volatile categories: lodging prices failed to rebound as much as expected (0.4% vs 1+% expected, -1.9% prior), while auto insurance surprisingly deflated (-0.1% vs 0.8% expected, 1.2% prior).
  • Airfares unexpectedly accelerated to 3.2% (3.2% prior but a little lower unrounded; 0.7% expected).
  • Meanwhile medical care services softened to 0.4% from 0.7% in September. Some had seen an acceleration in October, also helping explain part of the softness in supercore versus expectations.
  • Health insurance was non-volatile despite the the semi-annual data benchmarking taking place this month - rising 0.5% M/M vs 0.4% prior.
188 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

For services, core was exactly as expected at 0.35%, and basically unchanged from September (0.35%). However, supercore (core services ex housing) came in on the soft side at 0.31% vs 0.39% expected, 0.40% prior. The key factors that help explain the in-line services but the softer supercore:

  • Owners' Equivalent Rents and Primary Rents came in above expected, at 0.40% (0.33% expected, 0.33% prior) and 0.30% (0.28% expected, 0.28% prior) respectively. The magnitude of these surprises is not significant although overall it seems these categories are steadying out in the 0.3-0.4% M/M area.
  • The supercore softness was largely down to volatile categories: lodging prices failed to rebound as much as expected (0.4% vs 1+% expected, -1.9% prior), while auto insurance surprisingly deflated (-0.1% vs 0.8% expected, 1.2% prior).
  • Airfares unexpectedly accelerated to 3.2% (3.2% prior but a little lower unrounded; 0.7% expected).
  • Meanwhile medical care services softened to 0.4% from 0.7% in September. Some had seen an acceleration in October, also helping explain part of the softness in supercore versus expectations.
  • Health insurance was non-volatile despite the the semi-annual data benchmarking taking place this month - rising 0.5% M/M vs 0.4% prior.