United States: September inflation profile – TD Securities

TD Securities economists Oscar Munoz and Eli Nir provide an early projection for United States (US) September Consumer Price Index (CPI , expecting Headline CPI to rise 0.54% m/m, driven mainly by an almost 8% jump in gasoline and firmer food prices. They see Core CPI slowing to 0.20% m/m, with services inflation mean-reverting and supercore easing after August’s surge.

Headline and core inflation projections

"Following the release of the August CPI report, we are providing an early look into our September projection based on multiple assumptions which may evolve as the month progresses and more data becomes available — particularly for volatile segments like gasoline prices, hotel rates, and airfares."

"Headline inflation is expected to gain additional strength in September rising 0.54% m/ m after increasing at an also strong 0.40% m/m in August (CPI NSA index: 336.510 vs the market's current fixing at 336.600). A close to 8% m/m increase in gasoline prices will act as the key culprit, with food inflation likely also accelerating."

"Our preliminary forecast for the September core CPI stands at 0.20% m/m (down from a firmer 0.29% in August), which would be consistent with a core PCE increase at 0.25%."

"Core goods prices likely increased modestly again with tariff-exposed categories moving largely sideways. Additional strength in both new and used vehicle prices is expected to boost goods inflation."

"Services inflation is projected to mean-revert following last month's telephone-services driven surge. Shelter likely saw some cooling on the back of another subdued rise in OER and hotel rates inflation losing speed at the margin. Medical care services and still-firm airfares are also expected to lift inflation in the segment."

"All of this should result in supercore CPI inflation slowing to a more manageable 0.23% m/m in September after unexpectedly surging to 0.51% in August."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)