CPI up a bit more than expected

• Headline up 0.744% and core up 0.198%
• Driven by energy (7.4%) and volatile components of core (apparel up 0.7% and tobacco up 0.8%)
• Stable components of core in line (OER 0.1% and medical 0.2%)

Recent decline in energy prices and weak wage numbers to put downward pressure on both headline and core in year ahead

Empire Survey

• Improves from -9.4 to -0.55
• Orders up from -8.1 to 5.9
• Shipments up from -4.8 to 11.0
• Employment up from -21.8 to -20.8

Industrial sector likely to show further improvement in shipments and orders in months ahead due to inventory rebuild (production was cut well below sales).

But this is unlikely to say much about demand, which is likely to remain anemic as employment (and income) conditions remain weak.