US CPI rose 0.1% in January while the core rate was up 0.2%, exactly as forecast. There are no revisions to December’s respective gains of 0.2% and 0.1%. Concurrently, the headline 12-month pace accelerated to 2.5% y/y versus 2.3% y/y, though the ex-food and energy rate was unchanged at 2.3%. Most components posted moderate gains with services prices increasing 0.4%, housing up 0.3%, and food/beverage costs 0.2% higher. Apparel increased 0.7%. Energy prices declined -0.7% from a 1.6% prior gain (revised from 1.4%). Transportation costs slid -0.6%. And personal computer prices dropped -1.1%. Real average hourly earnings rose 0.1% on the month, but slowed to a 0.6% y/y clip versus 0.7% y/y in December. The relatively steady price data, with no sign of a pick up in price pressures, will likely keep policy unchanged over the foreseeable future.
US initial jobless claims edged up 2k to 205k in the week ended February 8 following the unexpected -14k drop to 203k (revised from 202k) in the first week of February. Claims have been impacted significantly by holiday gyrations and the UAW strike for several months. The 4-week moving average was 212.0k, matching the 212.0k (revised from 211.75k) seen in the previous week. Continuing claims dropped -61k to 1,698k in the February 1 week after climbing 56k to 1,759k (revised from 1,751k) to end January.
The Dollar moved slightly higher following the data, where headline CPI was a tick cooler than expected, and jobless claims were lower than forecasts. USDJPY edged up to 109.78 from 109.70 while EURUSD slipped under 1.0850 from near 1.0865.
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Head Market Analyst
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