research conclusion
On December 10 US time, the US Department of labor released price data: in November, CPI was 6.9% year-on-year, the former value was 6.2%, the core CPI was 5.0% year-on-year, and the former value was 4.6%; CPI was 0.8% month on month, the former value was 0.9%, core CPI was 0.5% month on month, the former value was 0.6%. CPI and core CPI fell month on month, but the year-on-year growth rate was still significantly upward, and the growth rate reached a new high.
On a year-on-year basis, the current price rise in the United States is still concentrated in energy and transportation. The contradiction between insufficient supply and supply chain bottlenecks worldwide is still prominent, which needs to be digested on the time axis. Energy increased by 34% year-on-year and transportation services by 21%. In addition, as a high weight item in a basket of price levels, food and housing prices rose steadily, with food up 6.1% and housing up 4.8%, supporting the year-on-year growth rate of CPI at a high level. The rising trend of computer equipment prices has stabilized.
The pull of energy and food is still significant, and the core inflation mainly comes from the contribution of services. From the year-on-year pull and contribution of various sub items to CPI in November, the contribution of energy and food to price rise is still significant, with energy pulling 1.9% and food 0.9% year-on-year. Excluding energy and food, among the core items, services pulled 2.7% and commodities pulled 1.1%. The contribution of goods to price increases still mainly comes from used cars (0.6%), while the contribution of services to inflation mainly comes from housing (1.7%).
Oil prices and house prices are the key to the judgment of inflation trend, and pay attention to the possibility of year-on-year slowdown of the two price levels. Obviously, when we summarize the CPI sub categories, we can see that the trend of oil price and house price has played a decisive role in the future trend of US inflation. If only core CPI is considered, then housing price is the most important component. Compared with 2020, the overall global oil price in 2021 showed a more rapid and substantial upward trend. In November, the WTI crude oil price remained above $80, so the energy price maintained a high growth rate year-on-year. However, the amplification of the slope of this round of oil price rise began in November 2020, which means that energy prices will face more and more significant high base pressure year-on-year in the future. In terms of house prices, the year-on-year increase of house prices in large and medium-sized cities in the United States has also shown a slowdown trend since July and August. Rent and owner equivalent rent are expected to follow the trend of house prices. Therefore, we still suggest that the inflection point of inflation level is closer, and the year-on-year inflection point of CPI is earlier than that of core CPI.
The market's feedback on high inflation is gradually passivated. Previously, the market has continued to experience higher inflation and higher than expected, which has formed a consistent policy expectation for the fed to enter the interest rate increase channel in 2022, and the expectation of accelerated tightening of monetary policy has been further strengthened after Powell's recent speech on accelerating taper. After the release of inflation data that continued to rise in November, US bond yields fluctuated and fell, gold prices and US dollar indexes rose slightly, while US stocks rose. On the whole, they responded mildly to the high inflation data. Therefore, we believe that the period when the market is most sensitive and concerned about the rise of inflation has passed, and the feedback on high inflation in the United States is gradually passivated.
Risk statement
Oil prices continued to rise, exceeding expectations;
The labor gap continues to exceed expectations;
The risk that changes in assumptions affect the measurement results.
