ISMS 19: 5% March 2023 CPI Could Fall to 4% By Year-End; If Oil Doesn’t Fly
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Remember that CPI is not inflation
- Mar 2023 US CPI was 5%, down from 6% in Feb and off its June 2022 peak of 9.1%
- Mar 2023, the food component was up 8.5% but has come off its Aug 2022 11.4% peak
- Mar 2023, the energy component was down 6.4, a massive fall from its 41.6% June 2022 peak
- In Mar 2023, all other items were flat MoM at 5.6%, down from Mar 2022 6.5% high
- Without a surge in oil US, we forecast CPI could end 2023 at 4%
Two things that could derail YE23 4% …
- An oil price surge would push end-2023 slightly higher than 4%, but only slightly because it takes a few months for an oil price rise to impact CPI
- A US recession could quickly bring CPI below 4%