US CPI Preview: Forecasts from nine major banks, more acceleration?

All eyes are on US inflation for November. The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data on Friday, December 10 at 13:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of nine major banks regarding the upcoming US inflation data. The Consumer Price Index (CPI) is forecast to rise to 6.8% (YoY) from 6.2% in October. Meanwhile, Core CPI is expected to rise to 4.9% from 4.6%.  

Nordea

“We expect core inflation to print at 5.1% with risk to the upside, while headline inflation prints at 6.6%, the highest since 1982.”

ING

“Rising gasoline, housing and second-hand car prices will be the big movers, but growing evidence of rising corporate pricing power is also likely to be evident in the form of broad-based 0.3%+ MoM readings for most components. This is likely to leave annual rates close to 7% for headline inflation with the potential for core inflation to beak above 5%. If this is the case and the scientific evidence on Omicron suggests it is a manageable threat, then the expectations of an acceleration in the Federal Reserve’s QE tapering at the December FOMC meeting will grow.”

RBC Economics

“US headline CPI inflation is primed to rise to 6.6% from a year ago in November. We expect that higher fuel prices and stronger used autos prices will put upward pressures on the monthly reading.”

NBF

“We expect the core index to have gained 0.5% MoM following a 0.6% advance the prior month. As a result, the annual core inflation rate could jump to a 30-year high of 4.9%. Headline prices could have increased at an even faster pace (+0.8% MoM, +6.9% YoY), helped by another sharp increase in seasonally-adjusted gasoline prices.”

Deutsche Bank

“We are anticipating that headline CPI will rise to +6.9%, which would be the fastest annual pace since 1982. And they see core inflation heading up to +5.1%, which would be the highest since 1990.”

Citibank

“US November CPI MoM – Citi: 0.9%, median: 0.7%, prior: 0.9%; CPI YoY – Citi: 6.9%, median: 6.7%, prior: 6.2%; CPI ex Food, Energy MoM – Citi: 0.7%, median: 0.5%, prior: 0.6%; CPI ex Food, Energy YoY – Citi: 5.1%, median: 4.9%, prior: 4.6%. We again expect a strong increase in prices in November with services prices likely to pick up broadly over the course of the next ~6 months that would reflect elevated inflation expectations and a persistently tight labor market putting upward pressure on wages.” 

CIBC

“Overall, look for ex. food and energy inflation to rise to 4.8% YoY while adding support from food and energy back into the mix would see total inflation rise to 6.7% YoY. While we are slightly below the consensus forecast for monthly price increases, the pace of inflation will remain lofty, and is still in line with Powell’s comments regarding the price stability mandate having been met, suggesting little market reaction.”

SocGen

“We forecast a 0.7% MoM increase and a core increase of 0.4% for the November CPI. 

ANZ

“We expect a solid rise in both the US core (0.6% MoM) and headline (0.8% MoM) CPI in November owing to strong demand and ongoing supply bottlenecks. Higher energy/gasoline prices will continue to make a significant contribution to headline inflation, while ongoing sharp increases in rent and owners’ equivalent rent will ensure that core inflation remains elevated. Powell says with inflation high and growth strong it is appropriate to hasten the pace of its tapering. This will give the Fed the flexibility to hike rates earlier than they might have anticipated should inflation remain stubbornly high into 2022.”

See – Gold Price Forecast: XAU/USD to surge higher above $1,792 on downbeat US CPI data