United States CPI s.a

Info

History

Chart

Impact:

Medium

Source: U.S. Bureau of Labor Statistics

Next Release:

Date:

Forecast: 321.2

Period: Jun

What Does It Measure?

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Its primary focus includes inflation, purchasing power, and overall cost of living, assessing components like food, housing, clothing, transportation, and medical care.

Frequency

The CPI is released monthly, typically on the second or third week of the month, reflecting the price changes from the previous month and providing both preliminary and final estimates.

Why Do Traders Care?

Traders closely monitor the CPI as it is a crucial indicator of inflationary trends in the economy, directly influencing monetary policy decisions by the Federal Reserve. Higher-than-expected CPI figures may lead to increased interest rates, affecting asset prices across currencies, equities, and bonds, while lower readings may signal easing monetary conditions.

What Is It Derived From?

The CPI is derived from a comprehensive survey of prices collected from various sources, including retail stores, service establishments, and rental units. The index is calculated using a weighted average based on a fixed basket of goods and services to reflect consumer purchasing patterns effectively.

Description

While the CPI is primarily reported on a year-over-year (YoY) basis to indicate long-term inflation trends, it is also useful in its month-over-month (MoM) form for observing short-term changes in consumer prices. The YoY comparison eliminates seasonal volatility and helps economists gauge structural changes in inflation dynamics over time.

Additional Notes

As a lagging indicator, the CPI offers insights into past economic performance and trends, significantly affecting monetary policy and economic outlooks. Its movements provide context for other indicators, such as the Producer Price Index (PPI) and employment figures, helping traders and analysts assess the overall economic environment.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for USD, Bearish for Stocks. Lower than expected: Bearish for USD, Bullish for Stocks. Dovish tone: Signaling lower interest rates or economic support, is usually bad for the USD but good for Stocks due to cheaper borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise