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TD Securities analysts point out that the US core inflation picked up to a 6-month high of 1.2% y/y in April, while headline inflation rose to 1.7%.

Key Quotes

“The timing of the Easter holiday season likely played a major role in the pickup in core, as things such as travel and holiday prices will have been boosted this year vs last. Expect those effects to disappear in next month’s data.”

“Even still, on a 2-month average basis, core inflation has picked up in 2019 to 1.0% y/y from 0.9% y/y last year. Details of the report showed that the increase was almost all in services inflation, which jumped from 1.1% y/y in March to 1.9% y/y in April. Core goods rose from 0.1% y/y to 0.2% y/y.”