US May CPI 3.3% y/y versus 3.4% expected

Headline measures:

• Prior y/y 3.4%
• m/m +0.2% versus +0.3% expected
• Prior m/m 0.3%
• Unrounded % vs +0.313% m/m prior

Core measures:

• Core CPI m/m 0.2% versus +0.3% expected. Prior month 0.3%
• Unrounded core 0.163% vs +0.290% prior
• Core CPI y/y 3.4% versus 3.6% expected. Prior month was 3.6%
• Supercore m/m -0.045% vs +0.422% prior
• Supercore y/y +4.8% y/y
• Shelter +0.4% versus +0.4% prior month
• Shelter y/y +5.4% vs +5.5% prior
• Real weekly earnings +0.4% vs -0.4% prior
• Food +0.1% m/m vs +0.0% m/m prior
• Food 2.1% y/y vs +2.2% y/y prior
• Energy -0.2% m/m vs +1.1% m/m prior
• Energy +3.7% vs +2.6% y/y prior
• Rents +0.4% m/m vs +0.4% prior
• Owner’s equivalent rent +0.4% vs +0.4% prior
• Motor vehicle insurance -0.1% m/m (still up 20.9% y/y)
• Full report (pdf)

Eyes were on core services ex housing and even core services ex housing and auto insurance as the market tries to sort out what’s forward-looking and what are lingering artifacts of the previous round of inflation. USD/JPY slipped to 157.20 just before the data.and has immediately plunged to 156.45 in broad US dollar selling.

The market is now fully pricing in two FOMC cuts this year including 80% in Sept.

Airfares were -3.6%, new cars -0.5%, apparel -0.4%,
and hotels -0.18% as key signs of disinflation.

This article was written by Adam Button at www.forexlive.com.