Why Today’s Consumer Price Index Value Was Important

The Consumer Price Index (CPI) is a measure of the average change in prices over time for a basket of goods and services consumed by households. The value of the CPI is closely watched by policymakers and economists, as it can provide insight into the overall health of the economy and inform decisions about monetary policy.

Today’s CPI value, which is released by the Bureau of Labor Statistics (BLS) on a monthly basis, showed that the core number actually declined by .1% over the last month as tumbling gasoline prices and a moderating rise in grocery bills offset another surge in rent.

Consumer prices increased 6.5% from a year earlier, down from 7.1% in November and a 40-year high of 9.1% in June, according to the Labor Department’s consumer price index, a measurement of what people pay for goods and services. 

Prices for goods such as used cars and furniture have been falling or stabilizing as COVID-19-induced supply chain troubles have improved and demand has ebbed. But the cost of services has marched higher as more Americans return to traveling and other activities even as lingering worker shortages push up wages. 

This number is important to crypto because falling interest rates drive a pursuit for yield back into “risk” assets, of which crypto is now classified as. Note yields fell again today and have been falling since inflation readings peaked in the summer. This could be a potential catalyst to crypto accumulation once again.