US CPI Preview: Forecasts from 10 major banks, reacceleration in the monthly prints

The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data on Wednesday, November 10 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming US inflation data. Investors expect the CPI to edge lower to 5.3% on a yearly basis from 5.4% in September and see the Core CPI staying unchanged at 4%. 

TDS

“We expect inflation to slow significantly in 2022 as fiscal stimulus fades and supply constraints ease, but we don't expect the data to be validated in the very near-term. We forecast a strong 0.7% MoM rise overall (6.0% YoY), with the core index up 0.4% (4.4% YoY). We expect strong gains in the energy, used vehicles and health insurance components.” 

ING

“This week’s CPI data is likely to show a re-acceleration in annual inflation to 5.8% for the headline rate (the highest since December 1990) and to 4.4% for core (ex-food and energy). Surging housing costs, labour costs, energy costs and second-hand car prices are likely to mean headline inflation then pushes above 6% in December, with core inflation moving above 5%.”

NBF

“The improvement of the sanitary situation, coupled with acute supply chain constraints and dearer rents/airfares should have all exerted upward pressure on prices during the month. The core index could therefore have increased 0.5% MoM, pushing the 12-month rate up by three tenths to 4.3%. Headline prices could have increased at an even faster pace (+0.6% MoM, +5.9% YoY), helped by another sharp increase in seasonally-adjusted gasoline prices.”

CIBC

“With no evidence of supply constraints abating in October, price pressures likely heated up. Total inflation will have received a lift from energy prices, causing it to accelerate to 5.8%. Stripping out food and energy, core price categories also likely showed strong momentum as supply chain bottlenecks and higher input costs continued to put upwards pressure on core goods prices, while Delta-impacted core service prices could have stopped falling as activity indicators improved towards the end of the month. Strong wage gains lately could have also been a contributor, causing core inflation to accelerate to 4.3%. We are slightly below the consensus, but not by enough to have markets give any sigh of relief over the inflation threat to interest rates.”

RBC Economics

“We expect US Inflation remained elevated, growing by 0.5% in October from September, and up 5.8% year-over-year. Distortions to supply-side factors such as port congestion, input and labour shortages will continue to put on floor on price growth. Looking beyond the pandemic base effects, the more important focus will be on the evolution of monthly price gains.”

ANZ

“We expect a heady rise in the US core (0.4% MoM) and headline (0.6% MoM) CPI in October, as Supply-demand imbalances across product and labour markets continue to keep pressure on underlying inflation.”

SocGen

“We expect headline increase of 0.5% MoM due to energy and food.” 

Deutsche Bank

“Our US economists are at +0.47% (consensus +0.6%), which would be the strongest monthly reading since July. They think core will print at +0.37% MoM (consensus +0.4%).”

Citibank

“US Oct CPI MoM (Citi: 0.7%, median: 0.5%, prior: 0.4%); CPI YoY (Citi: 6.0%, median: 5.8%, prior: 5.4%); CPI ex Food, Energy MoM (Citi: 0.5%, median: 0.4%, prior: 0.2%); CPI ex Food, Energy YoY (Citi: 4.5%, median: 4.3%, prior: 4.0%). Amidst growing market conviction over the persistence of stronger inflation, we expect a strong 0.459% MoM increase in core CPI in October, the strongest increase since June, when elevated inflation prints were deemed transitory. We also see the risks as tilted towards the upside in October and in the following few months due to a combination of some normalizing prices but also a potential broadening of stronger prices across services.”

Wells Fargo

“Consumer Price Index report for the month of October is unlikely to offer much of a reprieve on the inflation front. Our forecast is for a 0.6% month-over-month increase on the headline index and a monthly increase of 0.4% on the core index. If realized, this would put headline CPI inflation at 5.9% YoY and core CPI inflation a bit lower at 4.4% YoY”

See: How to trade US inflation with EUR/USD, scenarios and levels to watch