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US Inflation Now Exceeds Target

James Boston
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US Inflation Now Exceeds Target

The US has released an update on price growth activity within the economy during the month of May. The headline figure is the Consumer Price Index (CPI) which year on year is now reading at 2.1%, this is a further rise on the 2.0% experienced in April, the markets had not anticipated any deviation from this 2.0% reading. On a month on month basis the CPI has risen 0.4% in May, this compares with a 0.3% rise in April and a consensus estimate of 0.2%.

The more stable Ex Food and Energy CPI reading for the month has come in at 2.0% on a year on year basis, this represents a gain on the 1.8% experienced in April and also a deviation from the anticipated 1.9% consensus projection. The month on month version of this metric is now showing growth of 0.3% compared to 0.2% in April, the market estimate was for no change to this 0.2% level.

On an absolute index basis the CPI for May is reading at 237.90, this non seasonally adjusted figure is higher than the 237.07 print received in April and also ahead of the market estimate for 237.55. The Core CPI on an absolute index basis is seasonally adjusted, this is now 237.78 which is an increase on April’s 237.16 reading.

Moving away from inflation the monthly new housing data has also just been published in the US. Housing Starts for May, month on month are currently at 1.001M, this is a slight fall on April’s 1.072M and misses the market consensus estimate for 1.050M new house starts for the month. In terms of Building Permits issued during the month, this figure now stands at 0.991M, this is a moderate drop on the 1.080M permits issued during the month of April and also falls short of the consensus estimate for 1.055M permits.

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