The headline reflects a 3.2 percent rise in gasoline prices. Natural gas and electricity prices were also much stronger than the PPI suggested. The good news is the 0.1 percent core, which supports the Fed's view that transitory factors have boosted inflation in recent months,
More Quotes from Ian Shepherdson:
We expect further gains over the next couple of months in the wake of the plunge in gasoline prices. If we're right, the data will signal first quarter consumption growth of the order of 4 percent.Ian Shepherdson
The new Fed Chairman clearly expects to have to raise rates a bit further, but the extent of the tightening is dependent on the relative performance of the labor and housing markets.
Ian Shepherdson
The survey has a good track record and the signal it is sending cannot be welcome at the Fed.
Ian Shepherdson
He used the word 'pre-emptive,' which was the signal he used before the March 1997 rate hike.
Ian Shepherdson
No doubt these numbers will be taken by the market as a clear sign of a softening housing market and, by implication, an indication that higher interest rates are biting. We are much more skeptical housing starts lag home sales, which have been depressed in recent months more by lack of inventory than by higher interest rates.
Ian Shepherdson
With productivity likely to slow a bit further, there is little room for maneuver. In short, good news today but not enough alone to change the outlook.
Ian Shepherdson
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