US CPI confirmed lower in December 2018 but the core holds and wages rise

December 2018 US CPI inflation data 11 January 2019

• CPI  1.9% vs 1.9% exp y/y. Prior 2.2%
• -0.1% vs -0.1% exp m/m. Prior 0.0%
• Core 2.2% vs 2.2% exp/prior y/y
• 0.2% vs 0.2% exp m/m. Prior 0.2%
• Real average weekly earnings 0.7% vs 0.3% exp m/m. Prior -0.1%
• 1.2% vs 1.2% exp y/y. Prior 0.5%
• Hourly earnings 1.1% vs 0.8% prior y/y

Overall, inflation as expected and no shocks but good news from wages.

USD not doing very much on this anyway. USDJPY 108.31, EURUSD 1.1524.

As you might have guessed, cheaper oil prices are behind the softer CPI and some of that is already feeding into the core numbers via lower air fairs.

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Ryan Littlestone

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