21 May 2015
US April headline CPI to decline to -0.2% yoy – Nomura
FXStreet (Barcelona) - Economists at Nomura, preview the US April CPI data release, expecting a small 0.1%mom increase which would take the headline inflation to decline by 0.2% yoy.
Key Quotes
“We expect headline CPI to show a small increase of 0.1% (0.06%) m-o-m in April following two consecutive months of solid 0.2% gains. That would lead the y-o-y change rate of headline CPI to decline by 0.2%.”
“The expected slowdown in headline inflation is attributable to stable gasoline prices and a more moderate increase in core CPI than the previous month. Retail gasoline prices measured by the American Automobile Association (AAA) barely rose in April, increasing by 0.7% m-o-m after increasing by 6.7% in February and 8.4% in March. On a seasonally adjusted basis, we expect the CPI energy price index to decline by 0.7% in April.”
“On food prices, given that the PPI’s finished food price index continued to decline, the CPI’s price index for food at home probably declined again. While we expect prices for food away from home, a proxy of menu prices at restaurants, to increase by 0.2% fueled by the recent tightening of the labor market in the industry, that is unlikely to offset the expected decline in food prices at grocery stores. On net, our forecast for food prices is a decline of 0.1%.”
Key Quotes
“We expect headline CPI to show a small increase of 0.1% (0.06%) m-o-m in April following two consecutive months of solid 0.2% gains. That would lead the y-o-y change rate of headline CPI to decline by 0.2%.”
“The expected slowdown in headline inflation is attributable to stable gasoline prices and a more moderate increase in core CPI than the previous month. Retail gasoline prices measured by the American Automobile Association (AAA) barely rose in April, increasing by 0.7% m-o-m after increasing by 6.7% in February and 8.4% in March. On a seasonally adjusted basis, we expect the CPI energy price index to decline by 0.7% in April.”
“On food prices, given that the PPI’s finished food price index continued to decline, the CPI’s price index for food at home probably declined again. While we expect prices for food away from home, a proxy of menu prices at restaurants, to increase by 0.2% fueled by the recent tightening of the labor market in the industry, that is unlikely to offset the expected decline in food prices at grocery stores. On net, our forecast for food prices is a decline of 0.1%.”