US CPI / UK GDP / Vinyl Records
The US February CPI numbers came in roughly in-line with the market consensus. Headline CPI increased by 0.4%mom, in-line with estimates and 0.1% above January's figure. The core CPI also increased by 0.4%mom, the consensus was for a 0.3%mom gain. However, as always, the devil is in the detail. The unrounded increase in the core was 0.358%mom, so just above mid, and well below January’s 0.392%mom. On the yearly reading, the headline print was 3.2%, 0.1% above forecast and the previous reading. Core was 3.8% higher, against the 3.7% consensus, and 3.9% reading in January.
We have the release of the producer price index (PPI) to look forward to tomorrow, the last major inflation figure the Fed will see before its meeting next week. At the time of writing, the chances of any changes to rates next week are priced at less than 1% by futures markets, while the chance of a cut in June has moved from above 60%, to just below, at the time of writing.
On this side of the pond, Office for National Statistics (ONS) figures showed the UK’s GDP rebounded in January, bringing to an end the technical recession in the second half of 2023. GDP rose 0.2%, in-line with expectations, following December’s 0.1% decline. However, industrial production numbers, both monthly and yearly, were not so upbeat. The monthly reading came in at -0.2%, against December’s +0.6% print, and a flat forecast, while the yearly reading rose 0.5%, 0.3% below surveyed, and 0.1% below December’s figure.
Sticking with the UK, it has been announced that for the first time since 1992, vinyl records have returned to Britain’s basket of goods used to calculate inflation. It reflects years of steadily rising sales. In 2023, nearly 6 million records were sold in the UK, the most since Pretty Woman was released. Other items added to the basket by the ONS this year include, surprise, surprise, air fryers, along with gluten-free bread. Products that have been removed include popcorn, draught stout, and hand sanitiser.
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