United States CPI

Info

History

Chart

Impact:

High

Source: U.S. Bureau of Labor Statistics

Next Release:

Date:

Forecast: 322

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, encompassing key areas such as housing, transportation, food, and clothing. It serves as a primary indicator of inflation, with a CPI value above 100 indicating inflation above the base year and below indicating deflation.

Frequency

The CPI is released monthly and typically provides a preliminary estimate on a specific day of the month, followed by a final figure that confirms earlier estimates, often occurring around the second week of each month.

Why Do Traders Care?

Traders monitor the CPI because it plays a crucial role in shaping monetary policy and has significant implications for the financial markets. Rising CPI figures typically suggest inflationary pressures, which can lead to an appreciation of nominal interest rates, affecting currencies such as the USD, and can influence stock market behavior positively or negatively depending on the market's inflation outlook.

What Is It Derived From?

The CPI is derived from a comprehensive survey conducted by the Bureau of Labor Statistics involving thousands of prices for a representative assortment of goods and services collected from various retailers and service providers across urban areas. The index uses a weighted average based on consumer spending patterns, employing a base year for comparison and accounting for seasonal adjustments.

Description

The CPI includes both preliminary and final reports, where the preliminary data reflects early estimates and is subject to revisions, while the final data provides a more accurate picture of price changes but is released later. The chosen reporting method is Year-over-Year (YoY), which mitigates seasonality, allowing traders to interpret longer-term trends and structural shifts in prices across the consumer sector.

Additional Notes

The CPI is considered a lagging economic indicator, as it reflects past price changes and broader economic conditions. It interacts closely with other economic indicators, such as the Producer Price Index (PPI) and employment reports, and can indicate future trends in consumer spending and overall economic health.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for USD, Bearish for Stocks. Dovish tone: Signaling lower interest rates or economic support, is usually good for the Currency but bad 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