• The PPI details show airfares up ‘just’ 2.9% M/M in April after an upward revised 11.1% M/M, compared to CPI airfares accelerating from 10.7% to 18.6% M/M (and providing half of the surprise in yesterday’s CPI).
• This PPI series is more important than CPI for PCE.
• Prior to PPI, JPM were tracking core PCE inflation at +0.25% M/M and MS at +0.33% M/M, notably slower than the 0.57% M/M for core CPI. It’s not clear what they’d assumed for airfares but it potentially opens an even larger than usual gap between the two measures.

Differences between PPI (blue) and CPI (white) airfares Source: Bloomberg