United States: August inflation profile – TD Securities

TD Securities’ Macro Research team, led by Oscar Munoz and Molly Brooks, projects a stronger US August CPI profile. Headline CPI is seen rising 0.39% month-on-month, with gasoline and food inflation rebounding. Core CPI is forecast at 0.24% month-on-month, while services and shelter components drive a firmer supercore measure, pointing to persistent underlying price pressures.

Headline and core CPI projections

"Following the release of the July CPI report, we are providing an early look into our August 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 likely to gain additional strength in August rising 0.39% m/m after increasing a more modest 0.07% m/m in July (CPI NSA index: 334.912 vs the market's current fixing at 334.890). We are anticipating the first increase in gasoline prices since May, with food inflation likely also accelerating."

"Our preliminary forecast for the August core CPI stands at 0.24% m/m (slightly up from 0.22% in July), which would be consistent with a core PCE increase at 0.20%."

"Core goods prices should fall after rebounding in July owing to a broad decline in tariff-exposed categories. A jump in new vehicle prices likely acted as an offset."

"Services inflation is projected to gain further momentum after last month's rebound in the series. Shelter likely saw an acceleration on the back of firmer rises in OER and rents, with hotel rates inflation shifting to positive after declining in June-July. Strengthening airfares and vehicle insurance are also expected to lift inflation in transportation services."

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