US: Core CPI expected to print a solid 0.3% increase for August - Nomura

Analysts at Nomura expect a solid 0.3% (0.256%) m-o-m increase in US core CPI for August following a 0.243% gain in July.

Key Quotes

“On a 12-month change basis, core CPI inflation should remain steady at 2.4% (2.367%) compared to 2.354%, previously.”

“Together with the reversal of previous month’s idiosyncratic declines of some volatile prices, persistent components will support a solid reading of core CPI in August. Beyond the August report, we maintain our medium-term view that core CPI inflation should remain slightly above the FOMC’s 2% target.”

“Among non-core components, energy prices likely picked up in August after softening in July. Food prices likely rose at a pace consistent with the recent trend.”

“Altogether, we forecast a 0.4% (0.357%) m-o-m increase for August headline CPI, which would be equivalent to 2.8% (2.826%) y-o-y. Our forecast for CPI NSA is 252.457.”