It also highlights that a series of lower numbers will roll off, particularly in June, July and August.

The good news is that today’s PCE core number was +0.261%, which is already putting downward pressure on this projection.

It also shouldn’t be too big of a surprise that inflation will be high with 0.33% monthly inflation. That’s a pace that would imply 4% annual inflation.

Digging through the details of today’s inflation report, much of it is focused in health care. Could those be one-off increases? Or will they be persistent as they work their way through different providers?

Meanwhile, there has been some helpful disinflation in autos and food. But will that run out before the inflation in healthcare and auto repair does?

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

• One month annualized trimmed mean 3.4% vs 5.7% prior
• Six month 3.1% vs 3.0% prior
• 12 month 3.1% vs 3.2% prior

One of the drivers of inflation (and a 5.15% weigh in the index) was a 1.4% m/m rise in ‚other purchased meals‘, which highlights how tough it is to eat out.

Other notable components included:

• Physician services +1.8%
• Financial service charges, fees, and commissions +3.5%
• Nonprofit hospitals‘ services to households +3.8%
• Government hospitals+3.8%
• Electricity +4.0%
• Motor vehicle maintenance and repair+4.8%
• Other purchased meals +4.1%
• Dental services +5.3%

Note the preponderance of rising health care costs.

Some sources of inflation trimmed out:

• Computer software and accessories +52.6%
• Shoes and other footwear +21.6%
• Net health insurance +15.5%
• Tenant-occupied stationary homes and landlord durables+5.7%

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