US benchmark CPI revisions: December CPI revised to +0.2% from +0.3%

• December CPI (excluding food and energy) +0.3% unchanged
• November +0.2% vs +0.1%
• October remains unchanged +0.1%
• Core CPI for the fourth quarter rose at an annualized rate of 3.3% without revision
• Core 6-month annualized CPI fell from 3.3% to 3.0% (this is an important metric for the Fed)

The US dollar initially weakened in response to the CPI revisions, with some breathing a sigh of relief that the revisions were not as high as last year.

As a reminder, Chairman Powell emphasized that these changes are important for the Fed to monitor.

One piece of data I’m watching closely is the scheduled revision of the CPI inflation rate next month. Recall that a year ago, when inflation appeared to be falling rapidly, the annual seasonal update wiped out the increase. The January CPI report and revised version for 2023 will be released in mid-February, which could change the inflation picture. My hope is that the revisions confirm the progress we have seen, but good policy is based on data, not hope.

January’s CPI report is scheduled to be released next Thursday, but current estimates suggest a year-on-year reading of +0.5% month-on-month down, primarily from January 2023. It is expected to fall to 2.9%.

There is a year-on-year CPI chart before the revision.

This is the month-on-month chart before the revision.