United States: October inflation seen cooling – TD Securities

TD Securities economists Oscar Munoz and Eli Nir project that US headline Consumer Price Index (CPI) will rise 0.30% month-on-month in October 2026, slowing from September’s 0.65% gain, with gasoline and food still contributing. They expect core CPI to increase 0.21% and translate into a 0.24% rise in core Personal Consumption Expenditures (PCE) Price Index, as core goods and services inflation moderate and shelter cools.

TD sees softer but still solid CPI

"Following the release of the September CPI report, we are providing an early look into our October 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 cool down in October, rising a still solid 0.30% m/m after a stronger 0.65% m/m September increase (CPI NSA index: 337.316 vs the market's current fixing at 337.250)."

"Our preliminary forecast for the October core CPI stands at 0.21% m/m (down from a firmer 0.33% gain in September), which would be consistent with a core PCE increase at 0.24%."

"Core goods prices likely lost some momentum on the back of a decline in used vehicle prices and cooling from apparel, recreation and IT goods. A pickup in household goods prices likely acted as a partial offset to the broad decline."

"Services inflation is projected to mean-revert following last month's broad-based increase. We look for shelter to throttle down — led by a reversal in OER — after an unexpected surge in the last report. Slowing inflation in transportation and recreation services is also expected to help tame price gains in the segment."

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