US CPI to reaffirm stall in disinflation progress?
Headline annual inflation is expected at 2.9% with core annual inflation expected at 3.2% in February. The monthly figures are siding with a 0.3% increase for both but the unrounded number is around 0.28% based on analyst estimates. While core annual inflation might come in marginally lower than January, it's still a high number and keeping above 3% for now. That reaffirms the slower or arguably stalled progress towards the 2% target. Here is what analysts have to say:Goldman Sachs:- Core CPI estimated at 0.29% m/m and 3.2% y/y- “Our forecast reflects an increase in used car prices (+0.6%) reflecting an increase in auction prices, an increase in new car prices (+0.3%) reflecting a decline in incentives, and another large increase in the car insurance category (+1.0%) based on premiums in our online dataset"- “We expect seasonal distortions to boost the communications (+0.3%) and airfares (+2.5%) categories"- Core PCE inflation estimated at 0.25% m/mWells Fargo:- Core CPI estimated at 0.27% m/m and 3.2% y/y - The report is "to reflect some giveback in a handful of categories that soared in January (e.g., prescription drugs, used cars, motor vehicle insurance and recreation services) and lead to softer monthly prints for both core goods and services"- Believes that there is "growing concerns over tariffs" and that is already affecting pricing decisions, which will keep consumer price inflation firmer overallBofA:- Core CPI estimated at 0.29% m/m and 3.2% y/y- “While this would be a notable moderation from Jan, it would still be a sticky-high print"- China tariffs will boost prices on core goods ex used car prices- Core services inflation should moderate but continuing to stay above levels consistent with Fed's target- "In short, CPI data should reinforce our view that inflation progress has stalled"Morgan Stanley:- Core CPI estimated at 0.32% m/m and 3.2% y/y- Core prices to decelerate amid a "milder push from wildfires and residual seasonality than last month"- “In core goods, we see broad deceleration after residual seasonality pushed up January although apparel reaccelerates after a weak month. In services, rent inflation moves sideways at 0.32%. Core services ex housing slows but remains high, with pressure from airfare and some continued push from residual seasonality" This article was written by Justin Low at www.forexlive.com.
Headline annual inflation is expected at 2.9% with core annual inflation expected at 3.2% in February. The monthly figures are siding with a 0.3% increase for both but the unrounded number is around 0.28% based on analyst estimates. While core annual inflation might come in marginally lower than January, it's still a high number and keeping above 3% for now. That reaffirms the slower or arguably stalled progress towards the 2% target. Here is what analysts have to say:
Goldman Sachs:
- Core CPI estimated at 0.29% m/m and 3.2% y/y- “Our forecast reflects an increase in used car prices (+0.6%) reflecting an increase in auction prices, an increase in new car prices (+0.3%) reflecting a decline in incentives, and another large increase in the car insurance category (+1.0%) based on premiums in our online dataset"- “We expect seasonal distortions to boost the communications (+0.3%) and airfares (+2.5%) categories"- Core PCE inflation estimated at 0.25% m/m
Wells Fargo:
- Core CPI estimated at 0.27% m/m and 3.2% y/y - The report is "to reflect some giveback in a handful of categories that soared in January (e.g., prescription drugs, used cars, motor vehicle insurance and recreation services) and lead to softer monthly prints for both core goods and services"- Believes that there is "growing concerns over tariffs" and that is already affecting pricing decisions, which will keep consumer price inflation firmer overall
BofA:
- Core CPI estimated at 0.29% m/m and 3.2% y/y- “While this would be a notable moderation from Jan, it would still be a sticky-high print"- China tariffs will boost prices on core goods ex used car prices- Core services inflation should moderate but continuing to stay above levels consistent with Fed's target- "In short, CPI data should reinforce our view that inflation progress has stalled"
Morgan Stanley:
- Core CPI estimated at 0.32% m/m and 3.2% y/y- Core prices to decelerate amid a "milder push from wildfires and residual seasonality than last month"- “In core goods, we see broad deceleration after residual seasonality pushed up January although apparel reaccelerates after a weak month. In services, rent inflation moves sideways at 0.32%. Core services ex housing slows but remains high, with pressure from airfare and some continued push from residual seasonality" This article was written by Justin Low at www.forexlive.com.
