Goldman Sachs’ “bottom line” on the US CPI report is an uncomfortable read

Goldman Sachs with their “bottom line” on the US inflation data, sounding like they want to convince themselves it’ll all be ok … but will it?

  • January core CPI rose 0.39%, 9bp above consensus expectations and compared to +0.28% in December. The year-on-year rate was unchanged at 3.9% compared to consensus of 3.7%.
  • The strength largely reflected start-of-year price increases for labor-reliant categories such as medical services, car insurance and repair, and daycare, and we assume inflation in these categories returns to the previous trend on net in February and March.
  • However, the large and persistent owners’ equivalent rent category (OER) was also surprisingly strong, perhaps driven by the rebounding housing market.
  • Used car prices fell sharply, and we continue to expect further declines in February and later this year.
  • We tentatively expect core PCE prices rose 0.34% in January (mom sa). We will update our estimate after this week’s import price and PPI data.

ICYMI, the CPI data info:

This article was written by Eamonn Sheridan at Source