April 15, 2023 | CPI, PPI, Retail Sales, Real Estate and How RMD’s are Calculated

<p>CPI Headline CPI came in at 5% compared to last year, which was the lowest level since the May 2021 report and well off the June 2022 high of 9%. Some reasons for the slower gain include gasoline which was down 17.4%, used cars and trucks down 11.2%, televisions down 14%, and uncooked beef roasts down 4.4%. Areas that remain elevated include transportation services up 13.9% (Airfare was up 17.7%), electricity up 10.2%, and food was up 8.5%. The big problem in the report continues to be the shelter index which accounts for about 1/3 of CPI and rose 8.2%. Some people may point to a concern over core CPI, which takes out the volatile food and energy components, as it rose 5.6% compared to last year and was higher than February's reading of 5.5%. But looking closer at the numbers, the shelter index accounted for about 60% of the increase in core CPI. Excluding shelter, the CPI rose just 3.4% from a year ago. I continue to believe the shelter index will level off as we progress through the year and have a much smaller impact on CPI. Overall, I would say this inflation report was a major positive and should provide evidence to the Fed that a pause in rate hikes could make sense.</p> <p>PPI Huge news on the inflation fronts as the Producer Price Index (PPI) showed a month over month decline of 0.5% in the month of March. This was well below estimates for the index to be flat in the month. Looking at the 12-month change, the index showed an increase of just 2.7%. This was the smallest increase since January 2021 and is well off the high from last March of 11.7%. The Fed has pointed to concerns over services pricing, but this report also indicated that prices for services fell 0.3% in the month which was the largest decline since April 2020. With a report like this I really believe the Fed should consider not raising rates at the next meeting. </p> <p>Retail Sales The headline retail sales numbers may concern some, but digging through the numbers they indicate exactly what we've been anticipating, a slowing economy not