WRAPUP 2-US consumer prices drop, but core inflation firming

by Frankie Norman April 12, 2018, 6:21
WRAPUP 2-US consumer prices drop, but core inflation firming

Egypt's annual consumer price inflation slipped to 13.1 percent in March 2018, compared to 32.5 percent in the same month of 2017, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

The steep monthly decline reflected the unwinding of temporary price increases during Lunar New Year holidays in mid-February.

On a monthly comparison basis, consumer prices stayed flat in March, after edging up by 0.2 % in February.

In the 12 months through March, the CPI increased 2.4 percent.

Consequently, the latest CPI print will not alter the central bank's monetary policy, given that inflation provides no reason to revise persistently loose monetary conditions.

Annual inflation is rising as the weak readings from a year ago drop from the calculation.

The IMF said in a report earlier that it expected inflation to fall to 12 percent by June and to single digits by 2019.

Core inflation, which excludes energy and unprocessed food products, climbed to 0.8 percent from 0.6 percent.

Japan will provide February numbers for core machine orders, plus March data for bank lending and producer prices. Economists polled by Reuters had forecast the CPI unchanged in March and the core CPI rising 0.2 percent from the prior month. It was the first drop in prices in nearly a year.

"This suggests to us that the Fed's preferred core PCE price inflation rate will be running at 2.0 percent by the June report, if not sooner", said John Ryding, chief economist at RDQ Economics in NY. Most officials have penciled in two or three more increases this year.

Market reaction:The Dow Jones Industrial Average and S&P 500 index were both set to open sharply lower amid worries about a US military strike in Syria and heightened tensions with Russian Federation.

China will on Wednesday release March figures for consumer and producer prices, highlighting a busy day for Asia-Pacific economic activity. Food prices edged up 0.1 percent after being unchanged in February. That was the biggest annual increase since February 2017.

That's not to say everything was cheaper last month.

Healthcare costs increased 0.4 per cent, with prices for hospital care shooting up 0.6 per cent and the cost of doctor visits rising 0.2 per cent. Apparel prices fell 0.6 per cent after two straight months of robust increases.

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