I’ve shown this graph before because it shows how the CPI chart overlaps some very easy combinations shortly.
What appeared, he indicated Omar el-shirefis that the numbers used on the chart are unseasonably adjusted, which is not what is common (globally, frankly) for m/m CPI numbers.
What it shows is that even if the CPI continues at 0.2% on a monthly basis through January, the year-over-year reading will rise to 3.9%.
This is a problem for two reasons:
1) If you use seasonally adjusted indices, a reading of 0.2% m/m would bring the CPI back to 2.5% in January.
2) If you insist on using season-adjusted numbers, there is a strong downward trend towards the end of the year (because price hikes usually take place towards the end of the year).
Here’s what’s planned (by Preston Caldwell) Shows if it was re-done for seasonal records.
By this metric, a reading of 0.2% m/m would be good to put CPI on the right track, especially considering that in March of 2024, y/y indicators will get easier.
The bottom line here is that we are closer to 2% than it looks and that is what the market is all about. That could change if the housing mix, commodity prices, and wages improve, but a reading of 0.2% month-over-month average is a good baseline for what we know about the economy.