US April CPI + 8.3% y/y vs. 8.1% expected

  • The previous was 8.5% compared to the previous year
  • MoM reading +0.3% vs +0.2% expected and 1.2% previous

Basic CPI:

  • YoY + 6.2% vs. 6.0% expected and 6.5% previously
  • MoM + 0.6% vs 0.4% expected and 0.3% previously

Details (month by month)

  • Energy CPI – 2.7% vs. +11.0% previously
  • Gasoline -6.1% vs. the previous +18.3%
  • New cars +1.1% vs. the previous +0.2%
  • Used cars -0.4% vs -3.8% MoM
  • Owner’s Equivalent Rent + 0.5% m/m vs. + 0.4% Previous
  • Food + 0.9% vs. +1.0% previously
  • fact profits

This is a pivotal report. The basic strategy is to buy risky positions with higher numbers than expected and sell them lower than expected but the market sometimes finds a way to tire everyone out in an environment like this, so be careful.

The chart above tells the story. We’re on track to pull back from very high year-on-year inflation but the shape of this curve is called into question. Will it be a quick return to an inflation rate of 2% or a long and slow process?

Many expected a faster decline in used car prices after rising 22.7% year-on-year through April, but they only fell 0.4% in the month. In May so far, we’re also seeing record US gasoline and diesel prices along with another hike in natural gas prices. This puts some new inflation in the pipeline.

The US two-year bond yield jumped to 2.84% from 2.62% initially with very low liquidity but fell to 2.72%.

One month CPI changes

US CPI Schedule April 2022

What stands out in the details is the food. Home groceries prices are up 1.4%, 1.5% and 1.0% month over month, respectively, for four months and up 10.8% year over year. This is accelerating and the highest since November 1980.

Leave a Comment