US CPI Preview: Forecasts from nine major banks, a number of factors are pushing inflation higher

The US Bureau of Labor Statistics will publish the September Consumer Price Index (CPI) at 12:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of nine major banks regarding the upcoming US inflation data. The CPI is expected to rise 0.3% in September as it did in August while Core CPI is projected to rise 0.1%.

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ANZ

“Rising energy and food costs should see US headline CPI rise by (0.4% MoM) at a slightly faster pace than the core CPI (0.3% MoM) in September. Supply-demand imbalances continue to keep pressure on underlying inflation.”

Deutsche Bank

“We expect a +0.41% headline (vs. +0.27% previously) and +0.27% core (vs. +0.10%) mom rate. This is a bit above consensus and would take the YoY rate to 5.4% (up a tenth) and 4.1% (unch) respectively.”

NBF

“The economic recovery likely continued to be hampered by COVID-19 during the month, but the negative effects of the virus should have been largely offset by supply chain constraints, allowing core prices to advance 0.3% MoM. As a result, the annual core inflation rate could rise one tick to 4.1%. Headline prices could also have risen 0.3% MoM, helped by an increase in seasonally-adjusted gasoline prices. This gain would leave the annual rate unchanged at 5.3%.” 

SocGen

“Much of the latest energy price jump did not fall in the scope of the September CPI. Nonetheless, energy was a contributor. Our headline and core CPI readings are 0.3% MoM gains, but this is a result of a round down on the headline and a round-up on the core CPI readings.”

RBC Economics

“US CPI for September will likely show another elevated YoY gain though the monthly pace of price increases is expected to remain smaller than the April-June surge during the initial reopening of the economy. Most of the increase in producer input costs has yet to flow through to consumer prices. The longer supply chain disruptions last and commodity prices remain elevated, however, the more likely price pressures become more pervasive and pronounced.”

CIBC

“Higher gasoline prices should have boosted total CPI in September, adding to pressures from supply chain bottlenecks in core goods categories, and likely resulting in a 0.3% monthly rise in prices to leave annual inflation unchanged at 5.3%. In core categories, the push and pull between a surge in used car prices amid other supply chain bottlenecks, against a likely drop in Delta-impacted service prices, could have resulted in a 0.2% monthly gain in core CPI. That would leave annual core inflation steady at 4.0% and implies some upside for core PCE inflation, the Fed’s preferred measure. With supply chain issues worsening, it’s possible that inflation could stay elevated for longer ahead even with the downside potential in Delta impacted service prices.”

Citibank

“CPI MoM – Citi: 0.3%, median: 0.3%, prior: 0.3%; CPI YoY – Citi: 5.3%, median: 5.3%, prior: 5.3%; CPI ex Food, Energy MoM – Citi: 0.2%, median: 0.2%, prior: 0.1%; CPI ex Food, Energy YoY – Citi: 4.1%, median: 4.1%, prior: 4.0%. We expect upside risks to services prices as a tight labor market leads to broadening wage pressures. This would be an even clearer sign inflationary pressures are more persistent.”

TDS

“Food and, especially, energy prices probably rose fairly strongly again in September, but the core CPI likely rose modestly, held down by a reversal of some of the recent strength in travel prices, including for used vehicles, lodging and airfares. We expect some strengthening again in Q4, reflecting further gains in energy prices and a bounce in used vehicle prices at the wholesale level, followed by more sustained moderation in 2022. The expected moderation in 2022 depends on significant weakening in travel-related prices following their surge in 2021; we are allowing for some further acceleration in rents.”

Danske Bank

“The MoM change in the core CPI is the relevant number to watch and it has come down to average 0.2% in July and August after readings around 0.7%-0.9% from March to June. Consensus is for a 0.3% gain, which seems fair in our view.”