Record Phone Service Price Jump Lifts US Core Inflation Above Forecasts

MacroDigital Finance Impact 4

โดย Bloomberg·

Summary · why it matters

A record jump in the price of cellular phone services helped push a key measure of US inflation above forecasts, likely sealing the deal for a Federal Reserve interest-rate increase next week. The consumer price index excluding food and energy climbed 0.3% in August from a month earlier, according to Bureau of Labor Statistics data out Friday, while the median estimate in a Bloomberg survey called for a 0.2% increase. The 5.9% surge in wireless telephone services prices alone added about a 10th of a percentage point to the core reading, a gauge that largely reflects prepaid and monthly plans offered by cellular carriers. Economists at Bank of America Corp., Barclays Plc and Pantheon Macroeconomics flagged recent plan changes by major carriers like AT&T Inc. and T-Mobile US Inc. as likely culprits, with AT&T saying earlier this year it would implement price increases on certain plans in August and T-Mobile recently retiring some legacy plans. Omair Sharif, president of Inflation Insights LLC, said that while the wireless index added 10bps to the core CPI and core ex-wireless would have been 0.20%, he does not think the Fed will have the luxury of slicing and dicing the data at the meeting next week.

AT&T Inc. ▲

T-Mobile US Inc ▲

Impact on stocks 6

Cloud & Digital Infrastructure▲ · 2 stocks

AT&T Inc.

▲ PositivePricingrelevance

AT&T's price increases on certain plans in August contributed to the record 5.9% jump in wireless services prices, boosting its revenue per subscriber.

T-Mobile US Inc

TMUS

▲ PositivePricingrelevance

T-Mobile's retirement of legacy plans helped drive the record surge in wireless telephone services prices, lifting its service revenue.

Financials▲ · 2 stocks