US headline CPI inflation to accelerate to 1.6% y/y in October - TDS

The US headline CPI inflation is forecasted by both TD’s Research Team, and the wider market to accelerate to 1.6% y/y in October, reflecting a 0.3% monthly increase in consumer prices (market: 0.4% m/m).

Key Quotes

“Energy prices are expected to drive the headline gain while food prices should be little changed on the month. Core prices should be slightly softer, with both TD and the market calling for a 0.2% m/m increase which will leave core inflation unchanged at 2.2% y/y.”

“TD looks for October housing starts to recover by 6.3% m/m to 1113k following the sharp drop in September, well below the market forecast for 1156k. Our forecast reflects a sharp rebound in multi-unit construction while single-family housing starts should prove more stable. We are slightly above the market on October building permits and look for just a 1.6% m/m decline while markets expect a drop of 2.5%.TD looks for the Philly Fed Index to push higher to 10 in November while the market looks for a slight pullback to 7.8.”