Analysts at Nomura offered their review of the US CPI result and a GDP tracking update.
“Core CPI (excluding food and energy) increased by 0.2% (0.182%) m-o-m in February, broadly in line with expectations (Nomura: 0.203%, Consensus: 0.2%). As expected, core CPI inflation slowed noticeably from a strong gain of 0.349% in January. As usual, there were some transitory factors as volatile medical care services prices fell but apparel and auto insurance prices jumped. However, looking beyond those effects, we think a deceleration in rent and vehicle price inflation in February could have implications for the medium-term inflation outlook. Thus, we maintain our relatively conservative view that core inflation will rise only gradually.
GDP tracking update: February CPI data were essentially in line with our expectations and did not affect our outlook for near-term price indices for personal consumption expenditure. Thus, our Q1 real GDP growth tracking estimate remains unchanged at 1.7% q-o-q saar.”