Whether you’re trading low-priced penny stocks or large-cap equities, conducting thorough research is crucial for understanding stock market movements. This week, the spotlight is on inflation figures, as the Consumer Price Index (CPI) data for April gets reported.
In this article, we discuss the main highlights from the April CPI report and offer an overview of the CPI data, its importance, and its connection to stock market economic information in 2023.
What Is CPI Inflation Data?
CPI stands for “Consumer Price Index.”
The U.S. Bureau of Labor Statistics explains it as“The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments).”
CPI is measures “the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas.”
What Time Is CPI Released Today?
CPI Data and the April Consumer Price Index report is released at 8:30 am ET today, May 10th.
Consumer Price Index Report For March 2023 & CPI Numbers
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in March on a seasonally adjusted basis. Over the last 12 months, the all-items index increased 5.0 percent before seasonal adjustment.
The index for all items less food and energy rose 0.4% in March, after rising 0.5% in February. Indexes that increased in March include shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. The index for medical care and the index for used cars and trucks were among those that decreased over the month.
Core figures were in-line with expectations, while headline figures were below what analysts had expected.
CPI Report Today: April Inflation Expectations
Following the May FOMC meeting and Fed Chair Jerome Powell’s press conference, a pause in interest rate hikes is still unconfirmed. While many had hoped the latest monetary policy did its job, the Fed remains focused on “data-dependent” next steps. Whether this means one more hike for 2023, a pause, or simply business as usual is up for speculation. However, the CPI report today will likely play a part in that set of data to consider.
CPI expectations for today:
- CPI MoM: 0.4%
- CPI YoY: 5.0%
- Core CPI MoM: 0.4%
- Core CPI YoY: 5.5%
Consumer Price Index Report For April 2023 & CPI Numbers
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in April on a seasonally adjusted basis, after increasing 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.9 percent before seasonal adjustment.
The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline. The increase in the gasoline index more than offset declines in other energy component indexes, and the energy index rose 0.6 percent in April. The food index was unchanged in April, as it was in March. The index for food at home fell 0.2 percent over the month while the index for food away from home rose 0.4 percent.
The index for all items less food and energy rose 0.4 percent in April, as it did in March. Indexes which increased in April include shelter, used cars and trucks, motor vehicle insurance, recreation, household furnishings and operations, and personal care. The index for airline fares and the index for new vehicles were among those that decreased over the month.
The all items index increased 4.9 percent for the 12 months ending April; this was the smallest 12-month increase since the period ending April 2021. The all items less food and energy index rose 5.5 percent over the last 12 months. The energy index decreased 5.1 percent for the 12 months ending April, and the food index increased 7.7 percent over the last year.
Breaking Down The CPI Data: Key Takeaways
- CORE CPI MoM: 0.4% IN LINE with expectations
- CORE CPI YoY: 5.5% IN LINE with expectations
- CPI YoY: 4.9%, BELOW expectations
- CPI MoM: 0.4% IN LINE with expectations
Other Inflation Data From April 2023
- The food index was unchanged in April. The food at home index fell 0.2 percent over the month, following a 0.3-percent decrease in March. Four of the six major grocery store food group indexes decreased over the month.
- The food at home index rose 7.1 percent over the last 12 months. The index for cereals and bakery products rose 12.4 percent over the 12 months ending in April. The remaining major grocery store food groups posted increases ranging from 2.0 percent (fruits and vegetables) to 10.4 percent (other food at home).
- The energy index fell 5.1 percent over the past 12 months. The gasoline index decreased 12.2 percent over the last 12 months, while the natural gas index fell 2.1 percent, and the fuel oil index fell 20.2 percent over the span. In contrast, the index for electricity rose 8.4 percent over the last year.
- The shelter index was the largest factor in the monthly increase in the index for all items less food and energy. Among the other indexes that rose in April was the index for used cars and trucks, which increased 4.4 percent, and the index for motor vehicle insurance which increased 1.4 percent. The indexes for recreation, household furnishings and operations, personal care, apparel, and education also increased in April.
The Stock Market Today – May 10, 2023
Immediately following the CPI report for April, broader markets surged higher. The S&P 500 (SPY) jumped to $414.91, the Nasdaq (QQQ) tested levels near $326 and individual stocks including Roblox (RBLX) made a sharp rebound following pressure in recent sessions.
In particular, Roblox reported its first quarter earnings in the stock market today. While it missed on earnings per share estimates, it beat on revenue projections for the quarter. The pre-market session for RBLX stock was a volatile one with shares dropping to $31.33 immediately following results. Just as quickly as the drop came, so did a rebound to highs of $39.24 during Wednesday’s regular session.
Later today, we’ll get more earnings from companies, including Disney (DIS) and Unity (U). These could play a role in Thursday’s early session.
While major indices were trading higher to start the day, most saw a significant turnaround shortly after the bell rang. The SPY dipped down to lows of $410.18, Nasdaq tested $322.46, and the Dow ETF (DIA) slumped to $333.64 from a premarket high of $337.94. There’s clearly a tug-of-war between bears and bulls in the stock market today. It may be why some retail traders are focusing more attention on penny stocks.
Shares of Harbor Custom Development (HCDI), for example, jumped over 200% during the first few hours of the market being open. HCDI stock climbed after news that Kitsap Community Resources waived contingencies in the sale of its Mills Crossing townhomes. It also released its non-refundable earnest money to Harbor. Kitsap is contracted to purchase the project for $14.25 million, with an expected close next month.
