US CPI Preview: Working or not Americans are spending less

The April Consumer Price Index will confirm the enormous impact of the economic closures on consumer pricing, whether CPI or the Fed’s preferred core PCE gauge, Joseph Trevisani, an analyst at FXStreet, briefs.

Key quotes

“The Consumer Price Index in April is expected to drop 0.7% after fading 0.4% in March. This would be the steepest monthly drop since the height of the financial crisis when CPI plunged 0.9% in October 2008, 1.8% in November and 0.8% in December.” 

“Core CPI, which excludes energy and food costs, is forecast to drop 0.2% following a 0.1% slide in March. If accurate this would equal the largest monthly drop in core prices since July 1980 and November 1982.”

“Annual CPI is expected to drop to 0.4% in April from 1.5% in March and the core rate is predicted to fall to 1.7% from 2.1%.”

“The central bank’s policy response has been in place for more than two months and will not change because of these anticipated deflationary months.”