We look for U.S. November CPI to increase by 0.2% both overall and excluding food and energy. Gasoline prices are likely to see a modest increase, at least after seasonal adjustment, but if household energy corrects lower following a strong October, the overall impact of energy will probably be modest.
Before rounding, we expect core CPI to increase by only 0.17%, which would be similar to the 0.16% seen in October. October's breakdown showed some volatility in the components, with weakness in housing and apparel but strength in medical care, autos and recreation. Some corrections may be seen for November, but risk probably lies on the downside, with apparel not having a record of reversing sharp monthly moves.
Growth excluding food and energy will likely be unchanged at 2.3% y/y, but risk leans to the downside. We expect overall growth to rise to 2.0% y/y from 1.8% y/y, as an energy decline from a year ago will drop out. With December and January also set to see energy declines dropping out, the gap between the headline and core y/y rates may be eliminated soon.