Alternative Macro Signals Newsletter - 11 May 2022

Newsletter

11 May 2022

NIPI-CPI look back

On several recent occasions, the NIPI correctly predicted the CPI direction while consensus was wrong-footed:

US Core CPI

Mix bag here. But if the NIPI got it wrong in the last 2-3 months, it was by suggesting even stronger Core CPI prints. As our readers know, a big part of the Core NIPI rise since the start of the year is rents.

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US Food CPI

Month-to-month volatility has been well-timed

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Euro area Core HICP

Core NIPI had been rising and nearing all-time highs

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Euro area Food HICP

The big spike in food prices was well-timed

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China food prices

The NIPI signaled rising food prices from end-March, well ahead of consensus

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To be sure, the NIPIs are not supposed to be inflation forecasts on their own. Their goal is to help with the hard-to-track qualitative info and enhance traditional data models.

Turns out, they're doing a fine job by themselves.

That's because most of, if not all, the unexpected volatility comes from the hard-to-track qualitative info the NIPIs capture.

New NIPI and NewsBot features pages

NIPI: Daily inflation measures derived from worldwide news

Inflation NewsBot: State-of-the-art NLP to identify relevant inflation news

Vote for the next NIPI country extension

After the first China NIPI release in February, we will further expand the country and language coverage this summer.

We'd love to hear suggestions. Let us know which country would be most useful:

New URLs

Granted "alternativemacrosignals.com" is slightly prone to typo... you can now use:

Website - https://alt.ms
Client Login - https://alt.ms/login
NIPI App - https://alt.ms/nipiapp

The longer URLs remain valid, so no need to update existing bookmarks.

Reach out

Earlier posts

Newsletter: Inflation forecast bias and how to remedy it with alternative text data. 18/03/2022. Available here.
Newsletter: China NIPI First release! 09/02/2022. Available here.
Newsletter: EM Inflation, US CPI Look-back, NIPI App Feature Update, 21/12/2021. Available here.
Newsletter: No Base Effects Here, NIPI bounded, 1/12/2021. Available here.
Blog Post: "The NIPI as a predictor of US inflation: Nov-2021 update", 10/11/2021. Available here.
Newsletter: 700+ / day, Chinese news. 10/11/2021. Available here.
Blog Post: "Tracking narratives to forecast food prices", 13/10/2021. Available here.