Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

Revisions show U.S. consumer prices a bit firmer than previously reported

Published Feb 10, 2023 09:12AM ET Updated Feb 10, 2023 02:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A person shops in a supermarket as inflation affected consumer prices in Manhattan, New York City, U.S., June 10, 2022. REUTERS/Andrew Kelly
 
JPM
-0.26%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Lucia Mutikani

WASHINGTON (Reuters) - U.S. monthly consumer prices rose in December instead of falling as previously estimated and data for the prior two months was also revised up, which some economists said raised the risk of higher inflation readings in the months ahead.

The consumer price index edged up 0.1% in December rather than dipping 0.1% as reported last month, the Labor Department's annual revisions of CPI data showed on Friday. Data for November was also revised higher to show the CPI increasing 0.2% instead of 0.1% as previously estimated. In October, the CPI rose 0.5%, revised up from the previously reported 0.4% increase.

The revisions were the result of recalculated seasonal adjustment factors, the model used by the government to strip out seasonal fluctuations from the data.

This routine procedure, which the Labor of Department's Bureau of Labor Statistics undertakes every year, covered data from January 2018 through December 2022. The not seasonally adjusted data are not revised.

"On the whole, we don't see major implications for our inflation outlook coming from the updated seasonal factors," said Daniel Silver, an economist at JPMorgan (NYSE:JPM) in New York. "But the stronger recent trend for the seasonally adjusted data does generate some upside risk looking ahead."

Excluding the volatile food and energy components, the CPI rose 0.4% in December, instead of 0.3% as previously reported. Data for November was revised up to show the so-called core CPI advancing 0.3% instead of 0.2% as initially estimated. October core CPI data was unrevised.

The BLS also updated spending weights used to calculate the CPI, which will be effective with January's CPI report. The weights previously reflected consumer spending in 2019 and 2020.

Housing now accounts for 44.384% of the CPI, up from 43.008%. This reflected an increase in weight for shelter. Transportation now makes up 16.744% of the CPI, down from 17.737%. Food weight dropped to 13.531% from 13.867%.

Data next Tuesday is likely to show the CPI climbing 0.4% month-on-month in January and the core CPI gaining 0.4% as well, according to a Reuters survey of economists.

The survey was, however, conducted before the revisions and updates to the seasonal adjustment factors were published. Some economists, including Morgan Stanley (NYSE:MS), have since raised their estimates.

Higher inflation led the Federal Reserve to adopt an aggressive monetary policy stance, with the U.S. central bank hiking its policy rate 450 basis points since last March from near zero to a 4.50%-4.75% range. The Fed in recent months has slowed the pace of its interest rate increases.

"Core inflation should move higher again in January as core goods deflation takes a pause and methodological changes boost the housing component," Morgan Stanley said in a note. "Updated index weights could inject additional volatility, but we see the path to disinflation intact beyond January."

Revisions show U.S. consumer prices a bit firmer than previously reported
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
jason xx
jason xx Feb 10, 2023 3:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How do you know the revisions aren't wrong?
Brian Forgione
Brian Forgione Feb 10, 2023 11:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
MANIPULATION!
Gary Piccone
Gary Piccone Feb 10, 2023 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The consumers knew the prices were higher and will keep going higher
First Last
First Last Feb 10, 2023 11:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Everyone should know by now inflation rates are usually > 0%.
Casador Del Oso
Casador Del Oso Feb 10, 2023 11:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
High interest rates for much, much. much longer.
JIM VETTER
JIM VETTER Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gee, the government got it wrong? Or just intentional?
Show previous replies (4)
First Last
First Last Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Bill Powers   You see attacking bias and partisanship as being biased and partisan.
First Last
First Last Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Art Carrano  The gov't ain't lying as much now that Trump is not potus.
its private
its private Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
every democrat knows it was just an honest mistake.
First Last
First Last Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
its private   And some honest Republicans.
Anthony Doan
Anthony Doan Feb 10, 2023 9:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wrong again. Just give up. Biden is a crook with a crooked admin.
Art Carrano
Art Carrano Feb 10, 2023 9:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wow! The lies won't stop.
Ac Tektrader
Ac Tektrader Feb 10, 2023 9:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
but Art ,, in the past you've supported lies and deceit .. didn't you support Donald Trump and his band of government henchmen ....
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email