Economist: The market should not predict CPI solely based on PPI performance

ChainCatcher news, generally, there is sometimes a certain correlation between the weakness of the PPI and the weakness of the CPI in the same month. However, Santander Bank economist Stephen Stanley stated that the weaker-than-expected U.S. December PPI data does not necessarily mean that the December CPI data will also cool down. This correlation is particularly less obvious for the core CPI, which excludes the more volatile food and energy prices.

He pointed out that food and energy prices do show a good correlation between these two indicators, but the correlation with other categories of goods is lower. "My prediction for the CPI relies on the PPI prediction only for the food and energy part, but not for the core CPI," Stanley said. (Jinshi)