US CPI Preview: October 2023
Annual headline CPI growth expected to fall materially, but the core CPI could deliver an upside surprise
Headline CPI growth expected to fall to 3.3% YoY
With a relatively large prior comparable being cycled out of the YoY equation, and with a significant decline in regular gasoline prices (-5.6% MoM) putting downward pressure on monthly CPI growth, I expect the headline CPI’s annual growth rate to moderate to 3.3% in October, down from 3.7% in September. My 3.3% forecast is in-line with the consensus estimate.
Note that on a two-decimal place basis, my forecast is 3.35%, indicating the potential for growth to come in a 3.4%.
Core CPI growth expected to rise for the first time since March
For the first time since March, I expect the core CPI’s annual growth rate to rise — from 4.1% in September, I expect annual core CPI growth to hit 4.2% (4.23%) in October.
While this is only a modest increase, the potential shift to higher MoM growth (including the potential for growth to round to 4.3%), particularly when the consensus forecast is at 4.1%, has the potential to negatively impact market senti…