U.S. headline PCE inflation likely to have accelerated in November – TD Economics

The headline PCE inflation in the U.S. is likely to have accelerated in November. According to a TD Economics research report, the PCE inflation is expected to have accelerated to 1.8 percent, in line with the recovery in the CPI on higher energy prices.

Food prices are likely to have come in flat for the fourth month, though slightly higher on a year-on-year basis. Stripping food and energy, core rate is expected to have firm slightly to 1.5 percent year-on-year on a comparatively weak 0.1 percent sequentially.

Details might indicate many categories acting as a drag, notably apparel, while there is scope for healthcare services to disappoint its CPI counterpart. This still indicates towards a 0.1 percent sequential rise in the core PCE, matching the rise in the core CPI. Nominal PCE is likely to have risen 0.5 percent in November.

“We expect gains to again be driven by nondurables and services, partially offset by a drag from vehicle sales which continued to contract in November. We also expect a firmer 0.5% increase in November personal income”, added TD Economics.

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