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U.S. CPI (Apr) Actual 0.0%, Expected 0.0%, Previous -0.1%
U.S. Core CPI (Apr) Actual 0.3%, Expected 0.1%, Previous 0.2%
Release Explanation: The CPI measures the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of inflationary pressures. It is the most widely used Inflation indicator of central banks, institutions, and governments. It is used to calculate cost of living numbers for government programs. Each regional central bank will have their own CPI target rate, and each will differ in line with the way they individually want to control the aspects of their own economies.
”It can sometimes overstate inflation because it does not reflect price changes in new technology goods which are often declining in price as new innovations come into the market. Despite these criticisms, it remains the benchmark inflation index worldwide,” TheLFB-Forex.com Trade Team members noted. “CPI can be greatly influenced in any given month by movement in volatile food and energy prices, and therefore it is important to look at CPI excluding food and energy, commonly called the core rate of inflation,” TheLFB-Forex.com Trade Team members added.
TheLFB-Forex.com Trade Desk Thoughts: The U.S. Consumer Price Index remained stable in April, the Labor Department said today. That was inline with what economists had expected but higher than the 0.1% decrease seen in March. The Core CPI, which excludes volatile items such as food and energy, rose 0.3% in April, maintaining the steady pace of growth seen over the last few months.
For the year to April, the CPI is sitting at -0.7%, extending the first 12 month decline observed since 1955. However, the less-volatile core CPI index was up 1.9% from one year ago, well within the range that Federal Reserve officials prefer.
TheLFB-Forex.com Trade Team noted that monthly data shows that the CPI was dragged lower by a 2.4% decrease in the energy index. At the same time, the energy index is also responsible for the yearly decline, falling approximately 25.2%. Except for medical care and other goods and services, all items tracked by the CPI index decline. Food prices shed 0.2% in April from the previous month, while housing declined 0.4%
Forex Technical Reaction: S&P futures have improved slightly since the release but remains in negative territory. Since the 08:30 EDT releases the dollar has weakened in the broad market.
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