How Durable Is CPI?

Not Very & Too Much

April 10th, 2025 - Volume 11 (2025) Missive 59 (Thursday)

• CPI posts negative headline for first time since May 2020

• Durable goods prices’ outweighed impact

• New economic signal

The Bureau of Labor Statistics released its monthly Consumer Price Index or CPI report this morning and the results were softer than expected. More specifically, the headline reading came in at -0.1 percent for the month of April compared to expectations of growth of 0.1 percent. Much of the softness was found in energy prices however as core readings of CPI (that is headline CPI stripped of the more volatile food and energy components) still managed to produce a positive, albeit also weaker than expected, level of 0.1 percent. More important than that, though, is trends in durable goods prices given the outweighed significance they’ve had on trend in Fed Funds as well as just how significant of an indicator they will become given what is transpiring about tariffs combined with the fact that the U.S runs large trade deficits with both capital and consumer goods.

Durable goods prices have had a significant impact on monetary policy as of late.

Taken altogether, the price of durable goods fell marginally in March to the tune of 0.01 percent. This is the second month in a row that durable goods prices have contracted and third