CPI data, but pre April 2nd/Claims

March CPI fell one tenth headline vs the estimate of a gain of one tenth. The core rate was higher by .1%, also two tenths below expectations. The y/o/y gains slowed to 2.4% headline and 2.8% core vs 2.8% and 3.1% in February. Weighing on the headline was the 2.4% drop in energy prices in part due to the drop in gasoline and fuel oil prices. Energy prices are down 3.3% y/o/y. Food prices in contrast rose by .4% m/o/m and by 3% y/o/y. ‘Food at home’ in particular was higher by .5% m/o/m and 2.4% y/o/y. ‘Food away from home’ saw a price gain of .4% m/o/m and 3.8% y/o/y.

Services ex energy prices were up just one tenth m/o/m and by 3.7% y/o/y, though still driving overall inflation. Rent growth remains overstated but also never reflected the real upside seen a few years ago. Owners’ Equivalent Rent rose .4% m/o/m and 4.4% y/o/y. Rent of Primary Residence was higher by .3% m/o/m and 4%. The former is a guess, the latter is real and the former should be scrapped from this calculation but the end result won’t be too much different. Medical care costs rose .2% m/o/m and 2.6% y/o/y but still WAY underestimating health insurance costs as here they were up .4% m/o/m and 3.1% y/o/y. Not reality. Dragging down service prices was the 5.3% drop in airline fares, maybe reflecting what Delta said yesterday about slowing demand. Hotel prices dropped a sharp 4.3% m/o/m and by 3.7% y/o/y. Also, finally there was a deceleration in auto insurance prices as they fell .8% m/o/m, though remain up by 7.5% y/o/y. Fixing a car saw prices up by another .8% m/o/m and by 4.8% y/o/y.