The Blubber

Many Americans are "consuming in denial" — continuing to spend and run up credit card bills even though they're short on cash — and that "they're looking to deflect some of the blame" to leaders in government, per Axios.

Meanwhile, this month, the overall Consumer Price Index (CPI) for the previous month experienced a slightly higher-than-anticipated increase at 0.3%, while the core index, excluding food and energy prices, also rose by 0.3%, aligning with the median forecast from Bloomberg's survey. Shelter costs remained a significant contributor, accounting for over half of the overall rise in the cost of living. Annual inflation rates continue to surpass the target set by Fed policymakers, with the headline CPI showing a 3.4% increase over the 12 months leading to December, accelerating from the previous month.

The core CPI registered a 3.9% climb. Notably, motor-vehicle insurance costs spiked by over 20%, marking the highest increase since 1976. The supercore gauge, emphasized by Fed officials and measuring core services prices excluding housing, maintained a consistent pace, recording a 0.4% increase for the month and a 3.9% rise for the year in December, mirroring the previous month's figures. In parallel, the weekly jobless claims, reported on Thursday, came in lower than anticipated, totaling 202,000.

The number of individuals continuing to claim unemployment benefits decreased for the preceding week, indicating ongoing strength in the job market at the beginning of the year. While the data did not overtly support the possibility of Fed policymakers implementing interest rate cuts as early as March, the market response was somewhat restrained. Two-year Treasury yields remained steady at 4.36% as of 9:16 a.m. in New York, representing a marginal increase of about 4 basis points from pre-release levels. S&P 500 futures also exhibited stability, remaining flat after showing a slight increase of about 0.2% before the data release.

Read more: https://unusualwhales.com/news/cpi-comes-in-at-3-4-expected-3-2