CPI: Under the Hood

Headline comes in up .12 ( for a yoy basis - Dec 2.888 and Jan 3.00).

So what is happening under the hood…. we all know that services get the FED uncomfortable.

We can see below that Services (core) is in consistent slide of disinflation!

So it would appear that Goods is the root cause of the uptick in inflation this time. Below we can see that Transportation Costs (equate to 6.13% of the basket) are pushing higher

Based on simple correlation and relationship upward pressure should be expected in PPI and PCE (the FEDs preferred measure of inflation). Seen below in the purple… this is likely to move higher