Consumer prices rise 5% in March, 0.1% from February: CPI report

[00:00:00] Julie Hyman: Good morning. This is Yahoo Finance Live. I'm Julie Hyman with Brad Smith and Brooke De Palma. And we have March inflation data more benign than estimated. Month over month, consumer price index rising by just a tenth of 1%. That is the headline number, excluding food and energy in line with estimates with a gain of four-tenths of 1%. The year-over-year gain in headline CPI 5% and excluding food and energy 5.6%. But I think the takeaway here is that month-over-month increase on the headline basis, just 0.1%. That's half what's estimated and is a dramatic deceleration from the 0.4% that was recorded in the month of February. A lot of that in advance of this, economists were anticipating that there would be a slowdown in energy prices and gasoline and fuel and that that would help that headline number. Indeed, when you back it out, you don't see that same kind of, you just see a tenth of a percent deceleration in the month-over-month rise in inflation. So interesting there, guys, as we start to dig into these numbers. [00:01:07] Speaker 2: Yeah, and even some of the categories that we were looking at there, and consumers may look at this and think, okay, the importance of this report, number one, of course, what the Fed will do with this data here and what they're going to ingest and kind of extrapolate from this report. Because coming into this, FOMC FedWatch, or the CME tool, was already pointing towards a 73% chance or probability that they were going to issue a 25 basis point rate hike at their next meeting. But on the consumption front, at least here and now, today, for consumers looking through everything from the new vehicles and used cars and trucks, that is one area that we've actually been keeping an eye on over the course of this week, given some of the earnings reports that have come out and even some of the research reports giving us a little bit more inclination around where some of that price is beginning to moderate and where volumes actually are maintaining. Used cars and trucks, I actually saw that come down by about nine-tenths of a percent, and then over the 12 months, came down by about 11.2% for that year-over-year gauge there as well. [00:02:10] Julie Hyman: Yeah, just quickly, I wanted to mention what's going on with the markets in terms of reaction to this or lack of reaction to this, because we are not seeing a huge move in the wake of these numbers here. If I take a look at the futures, and you see there the movement, we're seeing a little bit of a movement, actually a push upward here. So it does look like we're seeing a little bit of a positive momentum and futures coming from little changed in the wake of these numbers, and now actually seeing a bit of a bump here. So we're going to be watching that, we're going to be watching what happens with yields today as well. And Brooke, I know you're looking at all the food components of this. [00:02:43] Speaker 3: Yeah, well, some really good news for consumers here. Food at home, groceries essentially down 0.2% compared to last month. This is the first decrease that we've seen in quite some time as that fluid inflation continued to persist year-over-year, though the number is still high, up 8.4%. But compared to last month, these are good numbers here and definitely show some relief. We're still seeing some persistent in eggflation, as you could say, month-over-month up 36%, but year-over-month up 30, I'm sorry, year-over-year up 36%, but down 10.9% month-over-month here. And in addition to that, we're seeing year-over-year dairy drop 1.3%, year-over-year lettuce prices drop 5.6%, tomatoes also down 3.4%. A lot of those produce there affected by California's wet weather, they had severe weather in March. And so, some surprising numbers there as well. [00:03:33] Julie Hyman: Yeah, I also wanted to mention what's happening with shelter, because this is an area that the Fed has really been focused on here. So, if you look at shelter overall, it saw a 0.6% gain month-over-month, which again is a bit of a deceleration, but a small one, right? Just a tenth of a percent slower than it was the month before in terms of the increase that we're seeing. That's really where the Fed's going to be looking to that and to services inflation as well, to see if there is more moderation. In other words, yeah, it's great, the gasoline prices are mitigating, but A, they could go back up again, and B, that's not what the Fed is really focusing on. [00:04:10] Speaker 2: Yeah, and within that services figure, transportation services, that continues to remain, at least on a year-over-year basis, one of the more outsized moves to the upside. In fact, the most outsized move to the upside year-over-year, 13.9% increase on the 12-month scale there. And then some moderation still month-over-month there, moving higher by about 1.4%. But then there's one other type of service or care that is important for us to think about, which is medical care. Even as we're going to continue to have the discussions around where there is so much importance for driving down some of the costs for medical care, medical care commodities, that continues to remain elevated year-over-year, up by about 3.6%. Not the biggest gainer, but of course, still a very important one for everyone at home. [00:04:54] Julie Hyman: So overall, inflation, decelering a little bit, a little, a little susan of disinflation here on the month and stocks higher.