US headline CPI showed a 0.3% m-o-m increase in December - Nomuras

Analysts at Nomura note that the US headline CPI showed a 0.3% (0.282%) m-o-m increase in December, matching the market consensus (+0.3%), but a little below Nomura’s forecast of a 0.4% (0.361%) gain.

Key Quotes

“However, on an unrounded basis, CPI NSA was 241.432, falling short of expectations (Consensus: 241.508, Nomura: 241.674). In details, relative to our expectations, non-core components (food and energy prices) were weaker than expected, but core CPI inflation accelerated slightly as we had expected to 0.230% from 0.151%, previously.”

“Overall, despite some weakness in non-core components, the underlying inflation trend appears to be moving broadly in line with our expectation. There is nothing surprising to lead us to alter our medium-term inflation forecast. Based on CPI and PPI, our forecast for core PCE inflation is +0.08% m-om in December, pushing up its y-o-y change rate slightly to 1.7% (1.661%) from 1.6% (1.647%). While there is much uncertainty associated with trade and tax policies under a new administration, we maintain our view that core PCE inflation will pick up, but only at a gradual pace.” 

“Core CPI: Excluding food and energy, core CPI increased by 0.2% (0.230%) m-o-m, matching expectations (Consensus: +0.2%, Nomura: +0.215%). Core CPI inflation accelerated from a 0.151% m-o-m in the prior month. The y-o-y core CPI inflation inched up to 2.2% from 2.1%, previously.”