Goldman Sachs: What we expect from the November US CPI report

Goldman Sachs forecasts moderate gains in both headline and core US CPI for November, driven by rising used car prices, airfares, and energy costs. The firm expects the core CPI to rise by 0.28% MoM (vs. 0.3% consensus), translating to a 3.27% YoY increase. Headline CPI is projected to increase 0.28% MoM and 2.7% YoY.

Key Points:

Core CPI Forecast:

• Monthly Increase: Expected at +0.28% (vs. +0.3% consensus).
• Year-on-Year: Predicted at 3.27%.
• Category Breakdown:
  • Used Cars: +2.0%, reflecting strong auction trends.
  • Airfares: +1.0%, supported by seasonal pricing patterns.
  • Apparel: +0.5%, driven by holiday retail pricing.
  • Car Insurance: +0.5%, reflecting rebounding rates.
  • Communications: -0.5%, likely due to seasonal promotional effects.
  • Shelter: Expected to decelerate, with owners’ equivalent rent (OER) at +0.33% and rent at +0.28%.

Headline CPI Forecast:

• Monthly Increase: Projected at +0.28%.
• Year-on-Year: Estimated at 2.7%.
• Contributors: Food prices seen up +0.25% and energy costs rising +0.3%.

Implications for Core PCE:

• Core PCE Outlook: Expected to increase by 0.20% MoM, pending final adjustments from CPI, PPI, and import price releases.

Conclusion:

Goldman Sachs anticipates moderate inflation pressures in November’s CPI report, with used car prices, airfares, and shelter components driving gains. The data should reinforce the view of gradually easing inflation but still supportive of a cautious monetary policy outlook.

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This article was written by Adam Button at www.forexlive.com.