Preview: Due September 11 - U.S. August CPI - Tariff impact slowly building
We expect August CPI to increase by 0.4% overall and by 0.3% ex food and energy, with the respective gains before rounding being 0.37% and 0.31%. This would be the second straight gains slightly above 0.3% in the core rate with the impact of tariffs starting to escalate.
We expect gains of 0.3% in both commodities ex food and energy and services ex energy. This will compare to respective July increases of 0.2% and 0.4%.
Goods are likely to see an increasing feed through from tariffs and with certainty over their persistence having increased in August a sharp rise cannot be ruled out. However signals from used autos continue to show little acceleration, reducing the upside risk. We expect services to slow from a July bounce that was inflated by a sharp rise in air fares which corrected preceding weakness, and is unlikely to be repeated. However we could see a bounce in hotels after a dip in July.
We expect a 0.3% rise in food with tariffs playing a part. Gasoline prices saw little change before seasonal adjustment but are likely to get a lift from seasonal adjustments, leading a 1.3% increase in energy. We expect yr/yr CPI to pick up to 2.9% after two months at 2.7% but the food and energy CPI to remain at the 3.1% yr/yr pace seen in July.
