"When is the next CPI report?" was a question no one was asking back in the days of 2% inflation readings.
Alas, those days are long gone. Inflation hit a four-decade high in 2022, prompting the Federal Reserve to embark on its most aggressive campaign of interest rate hikes since the late Carter and early Reagan administrations.
Though inflation peaked back in 2022, the fact remains that it's still too high for the central bank's comfort. That's why the Consumer Price Index, or CPI report, has become pretty much the star of the economic calendar.
Markets desperately want the Fed to stop raising interest rates – and especially look forward to a time when the central bank pivots to rate cuts – but that won't happen until after inflation is under control. There's also the very real fear that rising rates could cause the economy to fall into a recession.
This explains the market's obsession with the next CPI report. And the one after that, and the one after that.
For the record, the CPI report is released monthly by the Bureau of Labor Statistics, based on price data collected over the course of the month.
Per the BLS, prices for the goods and services used to calculate the CPI are collected in 75 urban areas throughout the country and from about 23,000 retail and service establishments. Data on rents are collected from about 50,000 landlords or tenants. The weight for an item is derived from reported expenditures on that item as estimated by the Consumer Expenditure Survey.
The CPI report is broken down into many subcategories, but the two main ones you'll hear most about on CPI day are headline CPI and core CPI. The headline number is the main inflation gauge. Core CPI excludes volatile food and energy prices, and is considered to be a better predictor of future inflation. The data are expressed as percent changes, and are measured both year-over-year and month-to-month.
As for the next CPI report, the April inflation figures are slated for release by the BLS on May 15 at 8:30 am Eastern time. The Federal Reserve Bank of Cleveland's Nowcast predicts annual headline inflation to increase by 3.5%, or the same rate as seen in the March CPI report. On a monthly basis, April inflation is forecast to rise 0.4%, or unchanged from the previous two months.
April's core CPI, which excludes volatile food and energy prices, is expected to increase 3.7% annually and 0.3% on a monthly basis. That would be cooler than the March reading in which core CPI rose 3.8% annually and and 0.4% month-to-month.
The inflation data will certainly influence what the central bank decides to do at the next Fed meeting. The FOMC left interest rates unchanged when it last met, and isn't expected to start cutting until late 2024.
