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US inflation and the squeeze on spending power
December US consumer price inflation rose 0.2% month-on-month at the headline level and 0.1% at the core (ex food and energy), both of which were a tenth of a percentage point lower than expected. The main surprise is the softness in the housing component, which rose just 0.1% despite the more positive newsflow on residential property in recent months. Note also in the chart below the slowdown in the core goods component, which suggests the inflation impulse from tariffs has already faded. Most other components were broadly in line with their recent trends although medical care remains an outlier with another strong ... (full story)