US core PCE inflation: Societe Generale outlines range guidance

US core CPI rose 0.3% month-on-month in October. Analysing the US inflation data, Societe Generale’s Jan Groen notes that the reading exceeded expectations. His estimates put PCE housing inflation at 0.28% and core-goods inflation at around 0.25%. Core PCE inflation is forecast at 0.27%-0.33%, depending on super-core PCE developments. The October PPI release is expected to help refine those estimates.

Core PCE expected to remain 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."

"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."

(An Artificial Intelligence tool helped create this article, which was reviewed by an editor. Find out more.)