US May CPI below the market's expectation - ANZ

Research Team at ANZ, notes that the US May CPI rose 0.2% m/m, slightly below the market's expectation of +0.3% and the y/y rate was 1.0% vs 1.1%.

Key Quotes

“Core inflation was as expected at +0.2% m/m and +2.2% y/y, up from 2.1%. Within the CPI data, services inflation (which is 60% of the CPI) rose 3.2% y/y as shelter (33% of the CPI) rose 3.4% y/y. Shelter costs are showing signs of firming rising 0.2%, 0.3%, and 0.4% m/m in February, April, and May respectively.

The Philadelphia Fed was better at 4.7 from -1.8. While the employment index dipped to -10.9 vs -1.8, the prices paid diffusion index rose to 23.0 vs 15.7. New orders were little changed at -3.0 vs -1.9. The data continue to point to a weak manufacturing backdrop.”