by Caitlin Kenney

In his morning note, Ian Shepherdson of High Frequency Economics keys in on the increase in the consumer price index (CPI). He writes:

The February CPI rose 0.4%, with the core up 0.2%; both increases were a tenth bigger than expected. The headline was boosted by an 8.3% rebound in gasoline prices, a bit less than we expected. Food prices dipped marginally.

In the core, the big surprise was a 0.8% rise in new car and truck prices, the biggest increase since November 04. We can say with confidence that this is not the start of a new upward trend in this incredibly depressed sector. The same is true of clothing prices, up 1.3%. This is a partial reversal of the massive fall discounts, nothing more; the pressure on clothing prices is downwards.

Elsewhere, rents and OER were both very subdued, rising only 0.1%, and lodging costs dropped 1.8%. Headline CPI deflation is still coming, and core disinflation will continue.