Which is good insofar as we’re going to get plenty more of it (see quote here). PPI upside surprise +1.1% vs. +0.7 m/m (Bloomberg). Core slightly below consensus  (+0.4% vs. +0.5%). AIER’s Everyday Price Index near my estimate of (1.18% m/m vs 1.16% nowcasted).

Figure 1: Headline CPI (bold black), chained CPI, n.s.a. (green), CPI for wage earners and clerical workers (red), CPI-ex shelter (orange), PCE deflator (purple), PPI final demand (teal), GDP deflator (pink), AIER Everyday Price Index (blue), all in logs, 2025M01=0. PCE deflator for May is Cleveland Fed nowcast of 6/11. Source: BLS, BEA, S&P Global, AIER, and author’s calculations.

May’s y/y CPI inflation expectation (from U.Michigan) was 4.8%. We get the June expectations tomorrow. As for the PCE deflator, the current nowcast (Cleveland Fed) is for 3.97% y/y.