On core inflation, a majority of analysts and estimate have it pinned in and around +0.3% m/m for July. As such, this makes Jefferies’ +0.246% reading a bit of an outlier in that sense. The firm says that “continued price increases in furnishings, apparel, and recreational goods are not expected this month”. Adding that “used car prices remained mostly unchanged despite tariff pressures, though seasonal adjustments may
reflect a slight decline”.
Meanwhile, they estimate headline inflation to come in at +0.172% m/m (vs +0.20% estimate). While that looks alright given that the figure will be rounded, Jefferies is arguing that there could be potential for a downside risk to the report.
“Airfare remains a volatile component; although airlines report strong sales, these are primarily in premium
cabins, which have limited influence on CPI. If basic economy fares remain flat, the seasonal adjustment
could still result in a 2.5% increase in the airfare component. Should this not materialise, the headline CPI
for the month may round down to +0.1%.”
So, we’ve seen UBS post their view on stronger inflation pressures earlier and over here we have Jefferies arguing for potentially a bit tamer readings in the report later. Just be wary that these are the bookends of the analyst calls ahead of the data release. Everyone else’s forecasts fall in these two and I’ll note some of the estimates later in the session (h/t @ MNI).
This article was written by Justin Low at investinglive.com.