US CPI Preview: Forecasts from 10 major banks, strong headline with rising energy prices

The US Bureau of Labor Statistics (BLS) will release the most important inflation measure, the US Consumer Price Index (CPI) figures, on Wednesday, September 13 at 12:30 GMT. As we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming United States inflation print for the month of August.

Headline is expected at 3.6% year-on-year vs. 3.2% in July, while core is expected at 4.3% YoY vs. 4.7% in July. On a monthly basis, headline and core CPI are seen at 0.6% and 0.2%, respectively.


We expect the report to provide additional evidence that the core segment has taken a step down in terms of sequential price gains: We are projecting another 0.2% MoM increase, which would mark the core's third consecutive month running at that pace. On the contrary, headline CPI inflation likely accelerated to 0.6% MoM largely as a result of surging gasoline prices in August. We are assuming a very strong 11% jump for the latter, though a chunk of that increase reflects an unfavorable seasonal adjustment. In YoY terms the headline CPI will likely rise to 3.6% from 3.2% in July, while the core segment will actually lose momentum, dropping to 4.3% from 4.7% YoY. 

RBC Economics

We expect headline CPI to tick up to 3.6% YoY in August, up from 3.2% in July. This increase is almost entirely explained by higher global energy prices. Aside from energy, US price pressures have eased substantially in recent months. Food price growth has moderated sharply and we look for ‘core’ (ex-food & energy) price growth to slow to 4.3% YoY in August from 4.7% the month before. That will drop the measure further below a 6.6% peak in September last year.


The energy component is likely to have had a sizeable positive impact on the headline index given the sharp rise in gasoline prices during the month. This, combined with another healthy gain in shelter costs, should result in a 0.6% increase in headline prices. If we’re right, the YoY rate could move up from 3.2% to 3.7%, marking the biggest increase in nearly a year and a half for this indicator. The advance in core prices could have been more subdued (+0.3% MoM) thanks in part to a decline in the price of used vehicles. This monthly gain should allow the annual rate to come down three ticks to 4.4%, its lowest level in nearly two years.


We expect a stronger increase in core inflation in August after two consecutive 0.16% MoM increases, with core CPI rising 0.3% MoM. However, at 0.252% MoM unrounded, core CPI would be close to printing another 0.2% increase, albeit still a stronger gain compared to June and July. We also expect some further slowing in shelter prices with 0.44% primary rents and 0.46% owners’ equivalent rent. Meanwhile, headline CPI should rise a strong 0.6%, the strongest increase since June 2022. This will be due to both a rise in retail gas prices and further strength in other energy components like utility gas.


For inflation, we look for fairly big jumps in August’s MoM headline readings with upside risk relative to consensus predictions. Higher gasoline prices will be the main upside driver, but we also see the threat of a rebound in airfares and medical care costs, plus higher insurance prices. These factors are likely to also contribute to core CPI coming in at 0.3% MoM rather than the 0.2% figures we have seen in the previous two months. Slowing housing rents will be evident, but it may not be enough to offset as much as the market expects. Nonetheless, the year-on-year rate of core inflation will slow to perhaps 4.4%. We are hopeful we could get down to 4% YoY in the September report and not too far away from 3.5% in October. We would characterise this relatively firm MoM inflation prints as a temporary blip in what is likely to be an intensifying disinflationary trend.

Wells Fargo

We forecast core CPI gained 0.18% in August, equating to a 4.3% YoY rate. If realized, the Fed would achieve its elusive 2% target on a three-month annualized basis. Within core, commodities and shelter likely propelled the deceleration. However, we expect a roughly 10% jump in gas prices to lift the headline rate to 0.6%. This would mark the largest monthly jump in headline CPI in over one year, bringing the YoY headline rate to 3.6%. Despite recent progress in core inflation, it strikes us as unlikely that the Fed will be able to meet its 2% target on a sustained basis over the next couple of quarters. Although we expect core goods prices to decline in August, the disinflationary momentum from normalizing commodity prices is set to fade. The drag from health insurance prices will also likely come to an end in October, setting up core inflation for an acceleration in Q4.


The August CPI will be the final piece of the puzzle for the Fed ahead of its September meeting. We expect the last few soft readings to start to form a trend, with core CPI in August expected to come in at a meagre 0.1% MoM as the easing supply chains will weigh further on core goods prices. We look for service prices to remain firm given solid demand but will be around the pace in recent months. Favourable base effects will also help push the 12-month change in core inflation down meaningfully to 4.2%. Headline CPI will tick up on higher gasoline prices to 3.5%. Given the Fed is sitting in a data dependent position and will continue to weigh risk management considerations heavily, a downside surprise should be slightly bullish for fixed income markets.

Deutsche Bank

Since gas prices have risen nearly 7% in August, headline CPI (+0.61% DB forecast vs. +0.17% previously) will see its largest monthly increase since June 2022. However, core (+0.22% vs. +0.16% last month) is likely to remain relatively becalmed. On these estimates, the YoY number for core CPI inflation should fall 0.4pp to 4.3%, whereas headline would rise 0.4pp to 3.7%, the highest for three months. With core inflation still relatively subdued, we think the positive momentum should continue, with the three-month annualised rate falling by about 90 bps to 2.2%, while the six-month annualised rate should fall by 50 bps to 3.6%. In both cases that would be the lowest since early 2021. So for now the strong headline print should be offset by the positive news on core. However, the risk is always that the longer headline edges up, the more risk of second-round effects down the road. See the fuller preview of what to look for in all the components in the preview link above.

Danske Bank

While higher energy prices likely lifted headline CPI by 0.5% MoM (3.6% YoY), we look for another low core CPI print at 0.2% MoM (4.3% YoY).


We forecast US core CPI to rise by 0.2% MoM in August. Higher energy prices should result in the headline CPI rising by a more substantive 0.5% MoM.


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