US: Core inflation tending toward target – Westpac

Sandeep Kanihama FXStreet Contributor

Analysts at Westpac point out that US core inflation (excludes food and energy) printed its strongest increase in 11 months in December as prices rose 0.3%.

Key Quotes

“Price gains were broad based across the sub sectors, with the most significant contributions coming from autos; health and rents. Overall, the December outcome gave further support to the view that the inflation pulse is strengthening. Over the year to December, core prices were up 1.7%yr, headline inflation 2.1%yr.”

“Come January, a similar result is expected, albeit with momentum in core inflation being a little more modest. Core prices are expected by Westpac and the market to rise 0.2%, leaving annual inflation at 1.7%yr. Headline prices are likely to rise 0.4% in the month thanks to strength in energy inflation. Base effects should still see annual headline inflation tick down to 2.0%yr, from 2.1%yr in December.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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