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Goldman comments on today’s mostly tame CPI report…The core CPI-excluding food and energy-increased by 0.1%, or 0.136% unrounded. The result was in line with consensus expectations, but the composition of the changes was unfriendly for the near-term inflation outlook. In particular, rent inflation accelerated significantly: owners’ equivalent rent (OER) rose by 0.21% (after a 0.12% gain in September), and rent of primary residence rose by 0.39% (after 0.23% last month). For rent of primary residence, the increase in October was the largest since the recovery began (for OER, the gain in October was the same as in August). The rent components of the CPI are highly persistent, and the latest gain suggests they could continue to put upward pressure on core inflation for the time being.
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