July CPI preview: Summer sizzle
|Summary
The July Consumer Price Index will bring further signs of higher tariffs pushing up prices. We estimate the core CPI rose 0.3% in July. This would mark the strongest gain in six months and push the year-ago rate back up to 3.0%, as firming goods inflation is no longer being offset by the softening in services. Headline inflation is expected to rise a more modest 0.2% in July due to a drop in gasoline prices and slightly tamer food inflation. If realized, the year-ago rate in the headline CPI would hold steady at 2.7%—a touch stronger than in the spring but lower than the start of the year.
It is still early in the price adjustment process to see how higher import taxes will ultimately be distributed between the end-customer, domestic sellers and foreign exporters. At the same time, growing consumer fatigue is making it more difficult to raise prices in general. We continue to expect inflation to pick up, but not ratchet higher, over the second half of the year, with both the core CPI and core PCE deflator returning to around 3% in the fourth quarter.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.