US CPI Revisions Confirm Inflation Progress at End of 2023

(Bloomberg) — US inflation was about the same at the end of last year as initially reported after incorporating annual revisions, according to new data published Friday.

Consumer prices excluding food and energy items rose at a 3.3% annualized rate in the final three months of 2023, matching the previous reading, Bureau of Labor Statistics data showed. Revisions to the headline figure were also minimal, though December’s monthly increase was marked down to a 0.2% advance instead of 0.3%.

us cpi revisions confirm inflation progress at end of 2023

No Surprises in Annual CPI Revision | Core consumer price index little changed in recent months

The uneventful revisions will come as a relief for Federal Reserve Chair Jerome Powell and his colleagues who are seeking more evidence that price pressures are sustainably receding before they begin cutting interest rates. Inflation moderated swiftly in the second half of last year, and policymakers have expressed doubts as to whether such rapid progress can be sustained.

“Today’s data primarily serves to solidify the market’s perception that Powell has made significant progress on inflation and therefore rate cuts will be in the offing, if not in March, then May or June,” Ian Lyngen, head of US rates strategy at BMO Capital Markets, said in a note.

Stock futures rallied and Treasuries fluctuated after the release.

This year’s adjustments have been subject to an unusual amount of anticipation after last year’s update caught policymakers and investors off guard. At the time, inflation had been on a solid downward trajectory, and some of that progress was subsequently revised away.

January figures due Tuesday are expected to show the so-called core index advanced 0.3% for a third straight month, representing a slight pickup on a three-month annualized basis.

What Bloomberg Economics Says…

“The updates, which largely matched our expectations, confirm the disinflation progress over the past year. More importantly, they show stronger disinflationary momentum in core services, the category the Fed worries most about. As a result, the core PCE deflator – the Fed’s preferred inflation gauge, which assigns a much larger weight to core services – will likely show slightly stronger disinflation toward end-2023 than originally realized.”

— Anna Wong and Estelle Ou, economists

To read the full note, click here

The BLS regularly adjusts monthly CPI data to remove seasonal factors that affect the numbers, such as model changeovers and holiday shopping. At the start of each year, the agency reevaluates those factors to keep up with the latest trends, hence the annual revisions.

–With assistance from Augusta Saraiva and Christopher Condon.

(Updates with comment from Bloomberg economists after seventh paragraph.)

Most Read from Bloomberg

    ©2024 Bloomberg L.P.

    News Related

    OTHER NEWS

    Aliw Awards nominations out

    ALIW Awards Foundation Inc. President Alice H. Reyes has released the names of finalists for the 2023 Aliw Awards to be presented on Dec. 11, 2023, at the Manila Hotel ... Read more »

    WhatsApp Web gains the feature of single-view photos and videos

    WhatsApp Web gains the feature of single-view photos and videos (Photo: Unsplash) The WhatsApp Web, the desktop version of the popular messaging app from Meta, has received an update allowing ... Read more »

    Young athletes’ time to shine in Siklab Awards

    Young athletes’ time to shine in Siklab Awards MANILA, Philippines — The future heroes of Philippine sports will be honored during the third Siklab Youth Sports Awards on Dec. 4 ... Read more »

    Local exec says 5-10 barangays still isolated in Northern Samar

    Graphics by Jannielyn Ann Bigtas A local government official said Monday that five to 10 barangays in Northern Samar are still isolated following the massive flooding in the area last ... Read more »

    App made by ex-jeepney driver will let you pay PUV fare, book tricycles

    DyipPay app lets you pay jeepney fare, book tricycles “Barya lang po sa umaga.” Everyone who rides jeepneys knows this rule: it may not be an actual law, but it’s ... Read more »

    Updated In-Season Tournament Bracket ahead of pool play finale

    Updated In-Season Tournament Bracket ahead of pool play finale Tuesday will mark the last day of pool play for the inaugural NBA In-Season Tournament. From there, six first-place teams and ... Read more »

    PCG forms teams for maritime emergency response

    PCG forms teams for maritime emergency response MANILA, Philippines — Recent incidents of fishermen lost in the waters off Southern Tagalog have prompted the Philippine Coast Guard (PCG) to form ... Read more »
    Top List in the World