US inflation preview: Monthly CPI to 0.1%, Core CPI at 0.4% – Societe Generale

Economists at Societe Generale expect the headline US Consumer Price Index (CPI) to soften while core CPI to tick slightly higher in August.

Key quotes

“Headline CPI to fall 0.1% m/m due to a plunge in gasoline prices.”

“Early September gasoline prices are still falling, implying a weak headline figure for September too.”

“Headline inflation rates peaked at 9.1% in June, fell to 8.5% in July and should register 8.1% in August. We expect the headline CPI to fall below 7% by year-end, but uncertainty over energy prices clouds that projection.”

“Core-CPI forecast is 0.4% m/m. That projection is based on a 0.6% shelter cost increase that is offset by weak pricing for apparel, motor vehicles and public transportation. These latter categories have been volatile.”

“We expect weak auto pricing in the quarters ahead, but the still tight inventory readings, which have been limited by semiconductors, mean that the monthly forecasts are more uncertain.”