US CPI Preview: Inflation expected to climb 0.3% in October - Wells Fargo

Next Wednesday, in the US, the consumer price index for October will be released. Analysts at Wells Fargo, expect a rise of 0.3% over the month, in line with market consensus. 

Key Quotes: 

“The consumer price index (CPI) was soft in September. Headline inflation was held down by a drop in energy prices, but a flat-tonegative reading in food prices also weighed on overall price growth. Excluding food and energy from the CPI, core inflation was also soft. Weakness here, however, appears to be tied to goods prices, specifically motor vehicles. The 3.0% drop in used auto prices was the most significant driver of softening, but is likely not the start of a trend, given that the Manheim used car index has continued to rise in recent months.”

“We expect price pressures to steadily build, as more businesses feel pressure from tariffs. Tariff effects may be drawn out, since businesses may have some ability to absorb increased costs, but with capacity tight, they may find it easier to pass on higher input costs to consumers. We expect the CPI to climb to 0.3% in October.”