CPI Tracking: Preview of December CPI Data

Insights

We expect that Food at Home monthly inflation decelerated by ~16 bps compared to Nov.

We observed decelerations across the board in all major categories. Compared to our early preview note, we observe stronger decelerations in Dairy products and notably in Fruits and vegetables.

Our observation of subdued pricing was significantly driven by large seasonal promotions that our retail partners executed near the holidays in December. The seasonal adjustment for the reported CPI might introduce additional tracking error to our forecast.

On an annual basis, owing in part to the base effect, we expect Food at Home's annual inflation to recede slightly to ~11.9% in December 2022, from the pace of 12.0% in November.

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CPI Preview Data

Monthly Inflation Date (as of 2023-01-01)	Nov 2022 Actual (Reported)	Lower	Midpoint	Upper	Direction
Cereals & Bakery Products	1.10%	0.80%	1.00%	1.20%	decel
Dairy & related Products	1.00%	0.45%	0.65%	0.85%	decel
Fruits & Vegetables	1.44%	0.64%	0.84%	1.04%	decel
Meat, Poultry, Fish, & Eggs	(0.21%)	(0.56%)	(0.36%)	(0.16%)	decel
Food At Home Component	0.49%	0.13%	0.33%	0.53%	decel

Methodology

Using the Odyssey retail point of sale dataset we have constructed some estimated CPI forecasts based on a simple and robust filtering and scoring methodology. We plan on releasing category and brand level insights bi-monthly.

Image Credit: Photo by Kenny Eliason on Unsplash.com