US: CPI to remain in focus this week – Nomura

Analysts at Nomura we expect a 0.2% (0.244%) m-o-m increase in US core CPI inflation for September following a 0.082% advance in August.

Key Quotes

“On a 12-month basis, our forecast translates to 2.304% in September, up slightly from 2.190% in August. We think m-o-m core CPI inflation will maintain a pace consistent with core inflation running slightly above 2% y-o-y. The relatively low level of core CPI inflation in August was mostly concentrated in certain volatile core goods prices and our September CPI forecast reflects some reversal of these idiosyncratic declines. For headline CPI inflation, we expect a 0.2% (0.192%) m-o-m gain, equivalent to 2.417% y-o-y.”

“In light of the second round of US tariffs on roughly $200bn of imports from China, September data on import prices of goods from China will be of interest. Overall, incoming data suggest the pass-through of the impact of US tariffs to consumer prices should be limited.”

“By locality of origin, import prices of goods from China continued to decline in August. Given that import prices do not include import duties, lower prices of imported Chinese goods indicate that exporters may be absorbing some of the impact from higher tariffs.”