Analysts at Nomura offer insights on what to expect from the US CPI report due on tap later tonight.
We expect headline CPI to increase by 0.4% (0.374%) m-o-m (2.3% y-o-y) in January, led by higher energy prices. Excluding food and energy prices, our forecast for core CPI is a trend-like increase of 0.2% (0.157%) m-o-m (2.1% y-o-y), although shelter-related prices pose some downside risks to our core CPI forecast. As for CPI NSA, we expect 242.447.
Excluding non-core components (food and energy prices), our forecast for January core CPI inflation is a 0.2% (0.157%) m-o-m increase (2.1% y-o-y), a slight deceleration from a 0.22% gain in December.
As for service prices, we expect some mean reversion in core service inflation, which showed a strong 0.281% m-o-m increase in December. Among core service prices, incoming information suggests that medical care service prices probably increased solidly.