Deflation in Core Goods Prices| No sustained relief on the Shelter CPI | Benign Estimates for July PCE | Consumer Spending Resilience
In this Second Part, we look at the economic data prints: A Benign CPI reading - mom inflation at 0.15% mom and Core print at 0.17% mom. Core goods disinflation continued with mom at -0.32% with 3m annualized rate at -1.93%. Core Services Inflation rose at 0.31% mom which is at pace higher than the average 0.18% mom in the prior 2 months. Super Core Services also rose at a mild 0.14% mom. The respite in Shelter inflation seen in June appears short lived with prices rising at 0.38% mom in July. There has also been a talk around re-acceleration in inflation as mild prints in the second half of 2023 weigh on the readings going forward. Fed members have also highlighted that the Inflation progress last year benefited from supply-side improvements like eased supply chains, increased labor force participation, and lower energy prices. However, these factors may not continue to reduce inflation, as supply chains have normalized, labor force participation has stabilized, and i...