Tag Archives: US core inflation

But the underlying pick-up in inflation in January was not as severe as it seems.January core CPI inflation was firm, as the index rose 0.35% month-on-month (m-o-m). The year-on-year print was unchanged at 1.8%.Was inflation that bad? Probably not. The sharp increase in apparel prices (1.7% m-o-m, the biggest monthly increase since February 1990) appears particularly suspicious and may fall back again next month. Some notoriously volatile sub-indices, such as leased cars, provided a further...

The inflation rate remains tepid, but we still think there is a greater probability that the Fed hikes rates in December than the market is currently pricing.CPI inflation was 0.4% m-o-m, boosted by gasoline prices, pushing the y-o-y print to a still-tepid 1.9%. Core CPI inflation was up 0.25% m-o-m; the y-o-y reading was stable at 1.7%.While improving from recent lows, there is no sign of a ‘regime shift’ in US inflation, despite the tight labour market. Globalisation and technology...

Just-released figures lead us to revise our forecasts for US spending and inflation.Real consumer spending increased by just 0.1% month-on-month in May. However, Q1 and April consumption figures were revised higher. The overall result was that between Q1 and April-May, US personal consumption grew by a strong 3.2% annualised. The strong bounce back in consumption growth expected has been confirmed, so that our forecast of 2.7% growth in consumer spending for Q2 overall now looks too low. We...

Virtually static in 2016, we continue to believe that core inflation will pick up only modestly in 2017.Core PCE inflation in the US settled at 1.7% y-o-y in December, in line with consensus and exactly the same rate as in February 2016. We continue to believe that PCE core inflation will pick up only modestly in 2017, ending the year at around 2.1%.Following a significant pick-up between October 2015 and February 2016 , y-o-y core PCE inflation stabilised at around 1.6%-1.7% for the...

Amid conflicting wage signals and low inflation expectations, core US prices look like rising only gradually to end 2017.Core US personal consumption expenditure (PCE) inflation remained stable at 1.7% year on year (y-o-y) in September, in line with consensus expectations. We continue to believe that core PCE inflation will pick up modestly over the coming months. Our forecast that it will reach 1.9% y-o-y by year-end and 2.1% in December 2017 remains unchanged.Labour market slack has...

Data released on 30 September continued to tally with our forecast of 1.5% GDP growth in the US for 2016 and a slow rise in core inflation to 1.9%. According to the Bureau of Economic Analysis (BEA), real consumer spending in the US fell 0.1% m-o-m in August, below consensus expectations. However, the figure for July was left unchanged, so that between Q2 and July-August, US personal consumption grew by 2.9% annualised.Other US data published in recent days has been mixed. Pending home...

Core PCE, the Fed's favoured inflation gauge, remained stable 1.6% in April Read full report here As widely expected, core Personal Consumption Expenditure (PCE) inflation in the US came in at 1.6% in April, the same rate as in March. Overall, we continue to believe that year-on-year (y-o-y) PCE core inflation — a key price measure for the Fed — will end this year at around 1.9%, i.e. only slightly higher than the average rate registered so far this year (1.7%). The marked pick-up in...