Calculated Danger: CPI Preview

The consensus is for a 0.2% improve in CPI, and a 0.3% improve in core CPI. The consensus is for CPI to be up 2.8% year-over-year and core CPI to be up 3.0% YoY.

From Goldman Sachs economists:

We count on a 0.33% improve in July core CPI (vs. +0.3% consensus), similar to a year-over-year charge of three.08% (vs. +3.0% consensus). We count on a 0.27% improve in headline CPI (vs. +0.2% consensus), reflecting increased meals costs (+0.3%) however decrease power costs (-0.6%). Our forecast is in keeping with a 0.31% improve in core PCE in July.
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Over the following few months, we count on tariffs to proceed to spice up month-to-month inflation and forecast month-to-month core CPI inflation between 0.3-0.4%. Except for tariff results, we count on underlying pattern inflation to fall additional this 12 months, reflecting shrinking contributions from the housing rental and labor markets.

From BofA:

We forecast headline CPI rose by 0.24% m/m in July, and core CPI elevated by 0.31%
m/m. If right, core CPI would improve to three.1% y/y from 2.9%. Tariffs seemingly drove an
acceleration in items worth hikes regardless of additional declines in car costs. In the meantime, a
rise in airfares ought to contribute to an uptick in core companies ex housing inflation.

Click on on graph for bigger picture.

This graph reveals the month-to-month change in each headline and core inflation since January 2024.

The circled space is the change for final July.   CPI was up 0.14% in July 2024, and core CPI was up 0.19%.  So, something above these readings for July will push up year-over-year inflation.