The March PPI data show the folly of relying too much on the CPI data. Our calculations suggest that, based on the combined inputs from PPI and CPI, core PCE prices increased by a more muted 0.21% m/m last month. That implies the 12m annual core PCE declined to 2.7% (2.66% to be exact so a 2.6% is possible). Although the three-month annualised core PCE rate probably picked up to 3.8% in March, from 3.5%, it looks like the six-month annualised rate fell back to 2.6%, from 2.9%.
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