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

U.S. headline consumer price inflation is expected to have risen in July. According to a TD Economics research report, the CPI inflation is likely to have accelerated to 1.7 percent, with prices rising 0.1 percent sequentially. Energy prices were mostly a small drag on lower gasoline prices while food prices are expected to offset.

Excluding food and energy, core inflation is expected to have come in at a subpar gain of 0.1 percent, keeping the year-on-year core rate stable at 1.7 percent. Risk for a continued drag from wireless services, vehicles and apparel prices imply that a 0.2 percent print might be difficult to reach this month.

If realized, the core inflation projection implies that transitory factors continue to be a drag, offering limited signs that price pressures are regaining steam and potentially spurring greater caution at the U.S. Fed with respect to rate normalization, added TD Economics.

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