US inflation: Core PCE range guidance – Societe Generale

Societe Generale’s Jan Groen analyzes October US inflation data, noting that October core CPI rose 0.3% month-on-month, surprising to the upside. He estimates PCE housing inflation at 0.28% and core-goods inflation around 0.25%. Depending on super-core PCE dynamics, core PCE inflation is projected in a 0.27%-0.33% range, with the October PPI release expected to refine these estimates.

Core PCE seen holding relatively firm

"October core CPI surprised to the upside at 0.3% m/m."

"Direct estimates suggest PCE housing inflation barely eased to 0.28% m/m, while PCE core-goods inflation likely was firm at around 0.25% m/m."

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"Depending on whether monthly super-core PCE inflation reverts toward its recent six-month average (0.28% m/m) or remains near the August-September pace (0.37% m/m), core PCE inflation would likely fall in a 0.27%-0.33% m/m range, with a central estimate around 0.30% m/m."

"The October PPI release will provide more clarity with regards to super-core PCE."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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