United States: Sticky inflation meets resilient growth - TD Securities
TD Securities expects September PCE data to confirm elevated US inflation pressures. Core PCE is forecast at 0.32% m/m and 3.1% y/y, with market‑based core PCE at 0.34%.
TD Securities anticipates that September's Core PCE data will reinforce evidence of persistently high inflation in the United States. The core PCE is expected to increase by 0.32% month-over-month and 3.1% year-over-year, with market-based core PCE at 0.34%. The headline PCE is forecasted to rise by 0.49% month-over-month, primarily driven by energy costs.
Real spending is projected to turn slightly negative, while income growth remains modest, reflecting a squeeze on consumers. The service sector is expected to contribute to overall growth, with GDP expanding by 2.5% in Q3, slightly surpassing the previous 2.2% growth rate. The underlying economic activity is expected to remain robust, with core PCE rising to 0.34% year-over-year.
The September PCE prices are likely to reflect the strong CPI data, indicating elevated inflation risks.
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