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Inflation Prediction as of April 2023 ---- CPI Headed to 3.3% Come Midsummer and PCE tracking

INFLATION Forecast: This is a forecast confirmation based on the updated CPI release on 4/12/22. Please see our last forecast from April 9th. This article shows the PCE as the primary FED inflation policy measure. Generally, PCE tracks with the CPI.


We had good inflation news this week. The best forecasts are regularly updated as new information is released. This week's CPI release adds another log to the fire of a continued inflation decline.

 

INFLATION: March 2023 as reported 4.12.23

Projected vs Actual and Look forward to April’s CPI to be released 5.10.23 + PCE as used by the Fed

 

CPI Projection & ACTUAL for March 2023 Data Published on April 12, 2023


Total CPI is rapidly declining and this decline will accelerate with March 2023 data. Annual CPI is currently 6.0% and will decline to 5.1% based on March monthly CPI coming in around 0.3% March actual came in at 0.1% replacing last year's 1.2% and annual drop from 6.0% to 5.0%. On 5.10.23 April 2022's 0.3% will fall off. Do NOT expect much change in next month's CPI--it may go up given how Energy prices are increasing and the total CPI for April 2022 is a moderate number of 0.3%


Energy was running up in March 2022. The monthly data point will fall out of the annual 12-month calculation. March 2022 was very large due to Russia's invasion of Ukraine. March ACTUAL came in at <3.5%> replacing last year's 11.0% and annual plummeted from 5.2% to a minus number, that being <6.4%> On 5.10.23 April 2022's <2.7%> will fall off. Given energy prices are increasing in April 2023 it is anticipated that energy CPI will have a semi-upward spike


Food will also contribute to the CPI improvement. March ACTUAL came in at 0.0% replacing last year's 1.0% and annual dropped from 9.5% to 8.5%. On 5.10.23 April 2022's 0.9% will fall off. Annual Food CPI will decline.


Core will likely increase not because March 2023 will be larger than February but rather the March 2022 monthly data was low and this time period will fall out of the calculation March ACTUAL came in at 0.4% replacing 0.3% and annually increase from 5.5% to 5.6%. On 5.10.23 April 2022's 0.6% will fall off. Annual Core will likely improve but by a moderate amount


Shelter which is half of the CORE continues to increase March ACTUAL came in at 0.6% replacing 0.5% and annually increased from 8.1% to 8.2%. On 5.10.23 April 2022's 0.5% will fall off. Do not expect much of a change in the Shelter's Annual CPI


Medical costs should continue to improve as March 2022 date drops out March ACTUAL came in at <0.5%> replacing 0.6% and annual decreased from 2.1% to 1.0%. On 5.10.23 April 2022's 0.5% will fall off. Medical CPI annual CPI will improve even further.


New Cars will likely increase. April 2023 should improve when the large April 2022 data drops out March ACTUAL came in at 0.4% replacing 0.2% and annually increased from 5.8% to 6.1%. On 5.10.23 April 2022's 1.1% will fall off. Annual CPI for New Cars will decrease.


Used cars will increase as the significant negative monthly percent for March 2022 will fall out of the annual calculation March ACTUAL came in at <0.9%> replacing <3.8%> and annually increased from <13.6%> to <11.2%>. On 5.10.23 April 2022's <0.4%> will fall off. Annual CPI for Used Cars will improve but not materially.


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