United States Inflation Rate YoY

Info

History

Chart

Impact:

High

Source: U.S. Bureau of Labor Statistics

Next Release:

Date:

Forecast: 2.5%

Period: Jun

What Does It Measure?

The United States Inflation Rate Year over Year (YoY) measures the percentage change in the price level of a basket of consumer goods and services compared to the same period in the previous year. This key indicator assesses the purchasing power of money, economic stability, and inflationary trends, focusing on components such as food, housing, transportation, and healthcare.

Frequency

This economic event is typically released monthly, with preliminary figures often published around the middle of each month following the reporting month.

Why Do Traders Care?

Traders monitor the inflation rate closely as it provides insights into economic health and can influence central bank monetary policy, impacting the value of currencies, equities, and bonds. Higher-than-expected inflation can lead to bullish sentiment for equities and bearish for fixed-income securities, while lower readings may reverse these effects, highlighting critical shifts in market expectations.

What Is It Derived From?

The inflation rate is derived from the Consumer Price Index (CPI), which is calculated based on price changes in a representative sample of goods and services purchased by households. The CPI is built from a survey that includes a diverse set of respondents, with a weighted average reflecting various consumption categories to produce a comprehensive measure of inflation.

Description

The inflation rate is presented as a year-over-year percentage change, making it a crucial measure for understanding long-term inflation trends while mitigating seasonal impacts. It serves as a coincident indicator because it reflects current economic conditions and has strong implications for both consumer behavior and monetary policy.

Additional Notes

The inflation rate is a leading economic indicator in its effect on monetary policy, signaling potential changes in interest rates that could influence economic growth. It is often compared to other indicators like employment figures and GDP growth, providing a holistic view of economic performance in the context of inflationary pressures.

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 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