Tag Archives: US inflation forecast

Leaving aside energy prices, there was only modest upward pressure on inflation in May.Rising energy prices continued to push up US inflation in May, but excluding this volatile category, underlying inflationary pressures remained tame, in contrast with the very solid labour market and above-potential GDP growth. This modest inflation picture is echoed by still-soft wage growth (below 3% y-o-y) and well-anchored consumer inflation expectations. In other words, there are still no signs that...

Momentum in core inflation remains modest and unlikely to spiral out of control in the near term.After a solid reading of 0.35% m-o-m in January – which scared some market participants – core consumer price inflation (CPI) proved tamer in February and again in March, posting a more moderate 0.18% m-o-m gain in both months. (That is not too far from the average since 2010 of 0.15% m-o-m). Due to base effects, the y-o-y reading rose to 2.1% from 1.8%.The relatively monotone core inflation...

December’s US tax cuts – which saw corporate taxation reduced particularly sharply – are being echoed in signs that ‘animal spirits’ are finally kicking in. Both set the stage, in our view, for higher US growth, in large part driven by greater investment. We therefore upgrade our 2018 US growth forecast from 2.0% to 3.0%. We forecast that real non-residential investment growth will accelerate to 7.0% in 2018, up from an...

The recent US tax cuts and abundant signs of increased corporate investment have led us to raise our forecast for growth and inflation in the US this year and next.December’s US tax cuts – which saw corporate taxation sharply reduced– are being echoed in signs that ‘animal spirits’ are finally kicking in. Both set the stage, in our view, for higher US growth, in large part driven by greater investment. We have raised our 2018 US growth forecast to 3.0% (from a previous forecast of 2.0%), as...