UOB Group Chief Economist Alvin Liew comments on the latest US inflation data released on 10 May.
“US headline consumer price index (CPI) rose 0.4% m/m, 4.9% y/y in April (from 0.1% m/m, 5.0% y/y in March), which is the lowest headline figure and the first below Print 5% inflation from April 2021 (4.2%). However, core CPI (which excludes food and energy) proved stickier as it rose 0.4% m/m sequentially (same as March) and eased slightly y/y to 5.5% y/y. April (from 5.6% in March).
“American inflation View – For 2023, we still expect headline and core inflation to moderate to an average of 3.0% and above the Fed’s 2% target. Even as housing costs rose more slowly and food prices remained flat for two straight months, the latest CPI data showed the balance of risks to US inflation is far from a one-sided disinflation, reflected in a surprise rebound in goods. inflation and higher gasoline prices. Core and services inflation remain elevated (y/y) and rising (m/m), while a re-acceleration in wage growth in April may add further pressure to service prices.”