US: Headline CPI increased modestly, slightly higher than the consensus - Nomura

Research Team at Nomura notes that the US headline CPI increased modestly by 0.122% m-o-m in February on higher food prices, slightly higher than the consensus but broadly in line with their forecast (Nomura: +0.113%, Consensus: +0.0%).

Key Quotes

“Excluding food and energy, as expected, core CPI inflation decelerated to 0.206% m-o-m, following a 0.308% rise in January (Consensus:+0.2%, Nomura:+0.185%). The slowdown in core inflation was due to subdued core goods inflation. However, the recent trend of consumer prices suggests that the items in core CPI which were previously held down by lower energy prices and stronger US dollar will likely strengthen, which supports our outlook that core inflation will pick up gradually.”

“Based on CPI and PPI, we expect core PCE price index to rise moderately by 0.164% m-o-m (1.71% y-o-y) in February.”