Waiting for the July Inflation Print

So this morning we received the May 2023 CPI Inflation print. The headline numbers read that CPI came in +0.1% Month over Month (MoM), Core Month over Month (MoM) of 0.4%, and +5.3% Core Year over Year (YoY) for May 2023.

Uhhh ….

I was not encouraged by the report. Not even a little bit.

As I have already stated I believe we are at a brand new critical juncture, for understanding inflation. On one had, there is the hope that the Fed is beginning to get a handle on Inflation through the use of aggressive rate hikes. But myself and others, including Chairman Powell himself, have concerns that inflation could become ‘structural’. Embedded within the fabric of the economy and the behavior of Producers and Consumers alike. And again … as I have already stated? I would like to see the July Inflation print before I think I can begin to come to any stance on inflation in the future … one way or another.

If ones are continuing to stare at the year over year (YoY) number for signs on slowing inflation? I fear they are forgetting how that number is calculated, and what staring at the YoY number will cause ones to miss; if we are truly stuck in a 1970’s type of ‘tug-of-war’ with Inflation.

What stood out to me? Is that Food jumped from 0.0 to 0.2, with Food-at-home increasing from -0.2 to +0.1. Food-away-from-home, also increased 0.1. Inflation on Used Cars and Trucks, which jumped from -0.9 in March 2023? Has stuck at +4.4. Shelter jumped back up from 0.4 to 0.6. This also means that Core Inflation (which the number the Fed looks to) really hasn’t budged.

That’s what stood out to me.

But again, I am waiting for the July Inflation print before I think about solidifying my thoughts. I still believe we are at a critical juncture.