December CPI Comes In At A Hot 0.5%, But Core Is Right In Line

The Number:

This probably isn’t going to be too much of a mover. CPI of 0.5% is a touch hotter than expectations. Core CPI (ex-food and energy) was right in line at 0.1%.

The full announcement from teh BLS is here.

Background: Yesterday we got a hot PPI report that showed producer prices jumping 1.2%. The question of course is: can companies pass these cost increases along? So far the answer has clearly been no, as inflation has drifted lower and lower despite higher commodity costs.

Obviously Bernanke is watching this one:

The official estimates are for headline CPI of 0.4%, and core CPI of 0.1% — the latter of which is key higher. Some sign that retailers have some pricing power would be quite welcome.

Meanwhile, markets are sliding into the news. Gold is getting shellacked.

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