United States: September inflation profile – TD Securities

TD Securities economists Oscar Munoz and Eli Nir have forecasted that the United States September Consumer Price Index (CPI) may rise by 0.54% month-over-month, primarily due to a significant 8% jump in gasoline prices and stronger food prices. However, they predict that core CPI will decelerate to 0.20% m/m, as services inflation levels off and supercore inflation eases after a sharp increase in August.

The analysts note that while headline inflation is likely to gain more strength in September with an expected 0.54% m/m rise, following a strong 0.40% m/m increase in August, they anticipate core CPI to be lower, at 0.20% m/m, down from 0.29% in August. This would translate to a core PCE increase of 0.25%.

Core goods prices are expected to grow modestly, with tariff-exposed categories remaining relatively stagnant. Nonetheless, there could be an uptick in prices for new and used vehicles, contributing to overall goods inflation. In the services sector, inflation is projected to mean-revert after the recent surge driven by telephone services.

Shelter costs may experience some cooling, as OER and hotel rates inflation lose momentum. Medical care services and airfares, which have remained firm, are also expected to contribute to inflation in this segment.

By the end of September, supercore CPI inflation is anticipated to slow to 0.23% m/m, from the unexpectedly high 0.51% in August.