CPI slows to 3.1 per cent
US inflation came in at just 0.1 per cent in November, and as such declined to 3.1 per cent over the year.
It's almost uncanny how market forecasters can predict these results down to a decimal point these days!
Shelter makes up 35 per cent of the price index for the US, and due to a quirk in the way rents are computed - basically with a huge lag - officially rents inflation continues to power along, up +0.5 per cent for the month.
Shelter inflation was still flying at +6.5 per cent higher over the year, but that's surely set to decline over the year ahead.
Back in the real world US asking rents are flat or falling across most markets.
Source: Bureau of Labor Statistics
Core inflation was still tracking at 4 per cent over the year, but the 6-month annualised pace here too was down to 2.9 per cent, and indeed the past 3 months are already tracking lower than the Fed's expectations.
Everyone seems to be so dialed in to the minutiae of how these indices are calculated these days, but it's probably smart to take a step back and look at the bigger picture too.
Crude oil and natural gas prices are way down from their highs, China is now experiencing outright deflation, and markets expect the Fed to be cutting interest rates in the first half of 2024.
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