|

US CPI rises and reviewed - Nomura

Analysts at Nomura explained that CPI rose 0.4% (0.402) m-o-m in August, in line with expectations (Nomura: 0.348%, Consensus: 0.4%), bringing the y-o-y rate to 1.9% (1.94%). 

Key Quotes:

"Among non-core components, food-away-from-home prices showed a decent increase. However, this metric tends to be more volatile in the summer, possibly due to changes in the school year. Energy prices increased strongly in August (2.8% m-o-m), driven by a sharp uptick in gasoline prices. 

Excluding food and energy, core CPI inflation rose 0.2% (0.248%), slightly stronger than expectations (Nomura: 0.189%, Consensus: 0.2%), driven by a sharp rebound in lodging-away-from-home prices as well as upside surprises from rent. Lodging prices, as we had expected, rebounded strongly (4.4% m-o-m), reversing a large decline in the previous month. Rent and owners’ equivalent rent (OER) inflation surprised on the upside, which is inconsistent with the fundamentals of rental housing markets. 

However, some of the increase in OER inflation appeared to be associated with data collection disruptions due to Hurricane Harvey. Core goods prices remained weak. The strongerthan expected core CPI increased the likelihood, in our view, of a December rate hike marginally but potential distortions from Hurricane Harvey and resulting noises to inflation data in coming months might mask the underlying trend of inflation."

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

More from Ross J Burland
Share:

Editor's Picks

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.



Gold sticks to gains above $3,900; bulls lack conviction as Fed and Iran risks support USD

Gold clings to modest recovery gains above the $3,900 mark during the Asian session, snapping its three-day losing streak to the lowest level since late September set the previous day. The US Dollar takes a breather after a strong three-day rally to its highest level since April 2025, offering some support to the commodity. However, firming US Federal Reserve rate-hike expectations and Middle East uncertainties continue to support the Greenback. This keeps a lid on any further upside for the precious metal.

Bitcoin just posted five straight losing weeks, and the storm may not be over yet

Bitcoin is struggling to find support, slipping below $70,000 as multiple headwinds threaten to push the Crypto King lower. The much-anticipated “Uptober” rally failed to materialize, with persistent selling pressure and widespread liquidations instead reinforcing the “Rektober” narrative.

Week ahead – Fed Minutes, inflation data and Nvidia earnings to guide investors

Fed minutes may add to hawkish tone as bets of 50-bps hike grow. Nvidia to report earnings as bar to impress high after spy scandal. Trade and geopolitics to be focal point of Trump-Xi summit.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.