Following the surge in stock prices during November, stock prices took a breather in early December as investors digested the strong gains and looked for additional evidence that the economy is on the path toward taming inflation without a deep economic slowdown, achieving the so-called soft landing. The inflation reports and the December FOMC meeting sent the rally in stocks and fixed income securities back into motion.
The CPI rose 0.1% month-to-month in November as gasoline prices fell -6.0%. The core CPI rose 0.28% in November, a little faster than the 0.23% gain in October with the year-on-year rise unchanged at 4.0%. Shelter costs rose a surprising 0.4% following a rise of 0.3% in October and accounted for 58% of the monthly rise in the core CPI and 65% of the year-on-year rise. In other words, if a real time shelter inflation measure — which has slowed significantly over the past 12-18 months but only filters into inflation data with a lag — was used in the calculation of the CPI, core inflation over the past twelve months would be just over 1%, below the Federal Reserve’s 2% target.
Adding on were both the headline and core readings for the producer price index being unchanged in November. Prices further back in the production pipeline point to a further easing in final goods inflation as prices for intermediate processed goods are down -4.1% year-on-year while prices for intermediate unprocessed goods are lower by -13.1%
The Soft Landing Arrives
The Soft Landing Arrives
Equity Markets
The Soft Landing is Here
Following the surge in stock prices during November, stock prices took a breather in early December as investors digested the strong gains and looked for additional evidence that the economy is on the path toward taming inflation without a deep economic slowdown, achieving the so-called soft landing. The inflation reports and the December FOMC meeting sent the rally in stocks and fixed income securities back into motion.
The CPI rose 0.1% month-to-month in November as gasoline prices fell -6.0%. The core CPI rose 0.28% in November, a little faster than the 0.23% gain in October with the year-on-year rise unchanged at 4.0%. Shelter costs rose a surprising 0.4% following a rise of 0.3% in October and accounted for 58% of the monthly rise in the core CPI and 65% of the year-on-year rise. In other words, if a real time shelter inflation measure — which has slowed significantly over the past 12-18 months but only filters into inflation data with a lag — was used in the calculation of the CPI, core inflation over the past twelve months would be just over 1%, below the Federal Reserve’s 2% target.
Adding on were both the headline and core readings for the producer price index being unchanged in November. Prices further back in the production pipeline point to a further easing in final goods inflation as prices for intermediate processed goods are down -4.1% year-on-year while prices for intermediate unprocessed goods are lower by -13.1%
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