While today's CPI will be far less relevant now that the entire macro picture has been reset after this weekend's trade war truce - which cut tariffs between US and China by 115% for 90 days...
...thus making any pre/post CPI number comparisons meaningless apples to oranges, the machines will certainly be reacting to what Bloomberg prints in the flashing red headline at 8:30am ET.
As we detailed here, higher-than expected inflation data is likely to accelerate the increase in yields spurred by the easing in trade tensions with China.
As Bloomberg's Alyce Andres notes, survey data ahead of Tuesday’s April CPI report sends a clear message that firms passed rising tariff-linked costs on to consumers.
Optically, inflation indicators (hard, not soft survey) have notably deflated in the last month...
Source: Bloomberg
So, what did we get - did the 'soft' survey data once again completely decouple from the reality of 'hard' actual data?
SHOCKER - Despite the panic from the establishment, headline CPI disappointed, rising 0.2% MoM (below the +0.3% exp), pulling the headline down to +2.3% YoY (below the 2.4% exp) - the lowest since February 2021...
Source: Bloomberg
That's quite a difference from the Democrat-sponsored surge in UMich inflation expectations (something it appears Democrats were unable to see or fear in 2021/2022 when President Biden was printing trillions in stimmies to save his base from actually working for a living)...
Source: Bloomberg
Under the hood, commodity prices just inched back into inflation (+0.1% YoY) while Services inflation continues to slide...
Source: Bloomberg
Headline CPI 0.2% MoM. Here are the details:
But Core Services rose MoM...
Source: Bloomberg
Egg prices - so much in focus during Trump's first few weeks after Biden's shitshow - plunged 12.7% MoM... the biggest MoM drop since March 1984...
Source: Bloomberg
Core CPI also rose 0.2% MoM (below the 0.3% exp) leaving it up 2.8% YoY as expected (lowest since April 2021)...
Source: Bloomberg
Source: Bloomberg
Core CPI +0.2% MoM. Indexes that increased over the month include household furnishings and operations, medical care, motor vehicle insurance, education, and personal care. The indexes for airline fares, used cars and trucks, communication, and apparel were among the major indexes that decreased in April. Here are the details:
And drilling down even more, the so-called SuperCore CPI (Services Ex Shelter) dropped to +3.01% YoY - the lowest since Dec 2021...
Source: Bloomberg
Recreation Services and Education costs are deflating...
Source: Bloomberg
Finally, as Goldman noted ahead of the print, whatever we do learn about tariff-related inflation today lags the rapidly-changing policy reality... so choose the size of the salt crystal to take as you react to the algos initial reaction to this data.
Is the inevitable trajectory of CPI higher given the recent surge in M2...
Source: Bloomberg
Real average weekly earnings rose 1.7% YoY - the best growth in wages since March 2021...
Source: Bloomberg
Brace for an avalanche of this statement repeated ad nauseum all day from establishment economists - "...we're sure the inflation from tariffs will hit next month..."
The new narrative: "lack of tariff inflation is transitory"
