There is a strong argument that the slower month-on-month CPI increase is due to weak consumer demand. Look at the breakdown of the categories.
Airline fares and gasoline prices dropped by 4.0% and 1.0% respectively. This suggests weaker consumer demand for travel.
New vehicle prices declined by 0.1%. This indicates consumers are holding back on large discretionary purchases. This also aligns with the consumer confidence index from a couple of weeks back which highlighted a drop in sentiment on large purchases in the near future by consumers
Overall the CPI and core CPI numbers reinforce my opinion that the economy is not doing well. Consumers are pulling back and businesses do not feel confident raising prices any more. This will reflect in the next set of readings - both inflation and labor market. I am not buying more stocks based off this report.
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