US: Inflation keeps pushing higher – UOB

UOB Group’s Head of Research Suan Teck Kin, CFA, reviews the latest inflation figures in the US economy.

Key Quotes

“On Wed (13 Oct), the latest CPI data released by US Bureau of Labor Statistics (BLS) showed consumer prices in Sep rose by 5.4% y/y from 5.2% in Aug, and at the fastest pace since Jul 2008. The outcome beat market expectation for a 5.3% gain. On a m/m basis, the headline CPI edged higher at 0.4%, ahead of both the reading for Aug and market expectation of 0.3%.”

“Core CPI (which excludes food and energy) in Sep rose by 4% y/y (same pace as in Aug) and 0.2% m/m, higher compared to 0.1% in Aug.” 

“YTD to Sep, the headline CPI averaged about 4.0%, which is on track to meet our forecast of 4.5% for 2021, before easing to 2.0% in 2022. Core CPI averaged around 3.1% YTD and is also headed towards our 3.5% target for this year before easing to 1.6% in 2022. We anticipate further inflationary pressures in the US in the remaining months of the year, given the range of factors driving up prices that will take time to resolve: recovering consumer demand, logistics bottlenecks, supply disruptions including key components such as semiconductors and in major production hubs including Vietnam and China, as well as elevated commodities and energy prices.”