As the US prepares to unveil its Consumer Price Index (CPI) report for July at 10:30 PM on Thursday AEST, economists and analysts are voicing their expectations for the upcoming data release. Here's a roundup of what experts are forecasting:
Pantheon Macroeconomics: The firm anticipates a consecutive 0.2 percent increase in the core CPI for July, while highlighting that the risks are skewed towards a 0.1 percent reading.
Morgan Stanley: The bank predicts a 0.2 percent core inflation figure for July, marking an uptick from June's 0.16 percent reading. This follows a trend of sequential rates lower than those recorded from December 2022 to March 2023, which averaged around 0.4 percent. Morgan Stanley also forecasts the headline CPI to be at 0.19 percent.
Goldman Sachs: Goldman Sachs expects a 0.15 percent increase in July's core CPI, slightly lower than the consensus of 0.2 percent. This projection corresponds to a year-over-year rate of 4.66 percent. As for the headline CPI, they anticipate a 0.16 percent increase, leading to a year-over-year rate of 3.17 percent. The firm anticipates monthly core CPI inflation to remain in the 0.2-0.3 percent range in the coming months, driven by factors such as moderated shelter inflation, reduced used car prices, and slower growth in non-housing services inflation due to softening labour demand. Goldman Sachs forecasts year-over-year core CPI inflation of 3.8 percent in December 2023 and 3.0 percent in December 2024.
TD Securities: The firm expects the core price inflation to remain subdued for July, projecting a 0.2 percent month-over-month reading, similar to June's figure. For the headline CPI, TD Securities also predicts a 0.2 percent gain. They emphasise that the core goods prices are likely to shift more decisively into deflation, while gains in shelter prices are expected to accelerate modestly. TD Securities' unrounded core CPI inflation forecast is 0.23 percent, suggesting the possibility of a 0.3 percent month-over-month advance to be greater than that of a 0.1 percent reading.
The projected figures come amid the broader economic context of changing inflation rates and the Federal Reserve's ongoing policy considerations. The July CPI report will be scrutinised by economists and market participants as they assess the health of the US economy and the potential implications for monetary policy moving forward.
