US: Core PCE price index broadly in line with expectations – Nomura

The US core PCE price index came in broadly in line with expectations, rising moderately by 0.089% m-o-m in July (Nomura: 0.069%, Consensus: 0.1%), notes the research team at Nomura.

Key Quotes

“While revisions to the past three months were mixed, y-o-y core PCE inflation declined, as expected, to 1.4% (1.406%) in July from 1.5% (1.506%) in the previous month (Nomura: 1.384%, Consensus: 1.4%). Overall, there are no major surprises in the underlying details.”

“Looking ahead, we think that y-o-y core PCE inflation could go down further in coming months, partly because of the base-effect from weakness in the first half of this year. Although this is the last PCE inflation print before the September FOMC meeting, we will have the August CPI report on 14 September, which should provide a good sense of what the core PCE price index will look like for that month.”