The US Bureau of Labor Statistics released the Consumer Price Index (CPI) data for July 2023 on August 10, 2023, at 8:30 am ET. The CPI is a measure of the average change in prices paid by consumers for a basket of goods and services over time. It is one of the most widely watched indicators of inflation and economic activity in the US.
The CPI data for July 2023
According to the official report, the CPI for all urban consumers (CPI-U) increased 0.2% in July on a seasonally adjusted basis, after rising 0.2% in June. The index for all items less food and energy, also known as core CPI, rose 0.2% in July, after increasing 0.2% in June.
Over the last 12 months, the all items index increased 3.0% before seasonal adjustment. The core index increased 4.8% over the last 12 months.
The main contributors to the monthly increase in the CPI were shelter, food, and transportation services. The main offsetting factors were energy, apparel, and used cars and trucks.
The CPI data for July 2023 were in line with the market expectations, which had predicted a 0.2% increase in both headline and core CPI. The consensus range for headline CPI was 0.1%-0.4%, while the consensus range for core CPI was 0.1%-0.4%.
The market reaction to the CPI data
The market reaction to the CPI data was muted, as the data did not show any significant deviation from the expected trend. The US stock market opened slightly higher on August 10, with the S&P 500 index gaining 0.1% and the Nasdaq Composite index rising 0.2%. The US Treasury yields also edged up slightly, with the 10-year yield rising to 1.36% from 1.35% on August 9.
The US dollar index, which measures the value of the dollar against a basket of six major currencies, was little changed at 92.82.
The Reddit discussion on the CPI data
On Reddit, a popular online platform for social and news discussion, some investors shared their views and opinions on the CPI data and their implications for the economy and the markets.
On r/investing, a subreddit dedicated to investing topics, a thread titled “August 10, 2023 United States CPI Release Discussion” was created by AutoModerator, a bot that automatically posts scheduled threads on various topics.
The thread had more than 150 comments as of August 11, with some of the most upvoted comments being:
- “I’m glad inflation is cooling off a bit. I was getting worried that it would spiral out of control and force the Fed to raise rates sooner than expected.” (54 points)
- “I don’t trust these numbers. They don’t reflect the reality of what I see in my everyday life. Everything is getting more expensive, from groceries to gas to rent.” (48 points)
- “Inflation is still high compared to historical averages. I think it’s too early to celebrate. We need to see more data before we can conclude that inflation is transitory or not.” (37 points)
- “I’m still holding my inflation hedge assets like gold, silver, and bitcoin. I think inflation will surprise everyone and stay high for longer than expected.” (32 points)
- “I’m not worried about inflation at all. I think it’s good for the economy and the stock market. It means that demand is strong and growth is robust.” (28 points)
On r/stocks, another subreddit focused on stock market news and analysis, a thread titled “US July CPI data released – What are your thoughts?” was created by u/stocknewsbot, another bot that automatically posts news articles related to stocks.
The thread had more than 100 comments as of August 11, with some of the most upvoted comments being:
- “I think this is good news for tech stocks. It means that interest rates will stay low for longer and valuations will remain high.” (42 points)
- “I think this is bad news for value stocks. It means that inflation will erode their earnings and margins and make them less attractive.” (38 points)
- “I think this is neutral news for the market overall. It means that nothing has changed much and we are still in a sideways trend.” (34 points)
- “I think this is irrelevant news for me personally. It means that I will continue to invest in quality companies with strong fundamentals and growth prospects regardless of inflation.” (31 points)
- “I think this is fake news manipulated by the government and the media. It means that they are hiding the true extent of inflation and its impact on the economy and the people.” (27 points)
