Announced this morning, the headline Consumer Price Index (CPI) increased 0.3% in April, less than expected and grew 3.4% on an annual basis, one-tenth below the annualized figure from the previous month. Monthly prices for Gasoline, up 2.8%, were relatively strong, while monthly prices for Used Cars and Trucks, down -1.4%, were relatively weak. Prices for Shelter were up 0.4%, the same as the previous month. The core rate, which excludes prices for food and energy, also increased 0.3% in April, as expected, and grew 3.6% on an annual basis, which is two-tenths less than the annualized figure from the previous month.
In addition, Retail Sales were flat in April, less than expected and six-tenths less than the revised increase in the previous month. Monthly sales for Gasoline Stations, up 3.1%, were strong, while monthly sales at Non-Store retailers, down -1.2%, were relatively weak. The Control Group, which is a closer measure of the inputs for GDP that excludes sales for food, autos, building materials, and gas stations, decreased -0.3% in April, less than expected and less than the revised level from the previous month.
Overall, headline CPI was just slightly less than expected in April, while the core rate was as expected. Annual rates were a bit less than the previous month. Inflation was a bit lower in the month but remains above the Fed’s target. Meanwhile, retail sales were flat in April, less than estimates, hinting that consumers may be slowing down. The Fed should welcome an environment where consumers spend a bit less, without adversely affecting the economy, to hopefully bring inflation levels lower. How this unfolds will be a key dynamic for the markets in the weeks ahead.
In all, the 10-year US treasury yield ticks lower following the report and equity futures are higher as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.
