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“It is better to fail in originality than to succeed in imitation.” – Herman Melville

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After a slow start to the week for economic data things are picking up this morning.  We’ve already had the release of NFIB’s Index of Small Business Optimism, but that’s just the appetizer for the October CPI report which is coming out as we send this.  Heading into the report, there was very little movement in markets as futures, interest rates, and commodities have seen little in the way of change from their closing prices on Monday.

When it comes to monthly inflation reports, things really have changed over the last year.  In October of last year, the market was trying to navigate a record pace of higher-than-expected CPI reports as the ‘transitory’ inflation of the Covid era decided to stick around longer than anyone had expected.  At the headline level, the trailing 12-month total of higher-than-expected headline CPI reports was at a record high of nine (top chart) while the trailing 12-month total of higher-than-expected Core CPI prints was also at a record high of eight (lower chart).

Fast forward 13 months and the ‘uncontrollable’ wave of inflation has crested. At the headline level, there has been just one higher-than-expected CPI report in the last 12 months, and that occurred last month. The last time this reading was that low was back in October 2019. At the core level, there have been just two higher-than-expected CPI prints, and that’s the lowest since August 2019.

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