US inflation: On the verge of 3% - ING

James Knightley, Chief International Economist at ING, suggests that US headline consumer price inflation surged to 2.8% in May with a strong chance it hits 3% in June.

Key Quotes

“May US consumer price inflation rose 0.2% MoM/2.8% YoY, which was in line with market consensus while core came in at 0.2%/2.2%, again, as expected.”

“Transport, tobacco, and housing were the main upside contributors. Gasoline prices have ticked lower so far in June, but we still think prices will on average be higher versus last month.”

“At the same time, there are growing signs of wage pressures, which will keep nudging service sector inflation higher. Consequently, we could see 3% headline inflation in June while we expect core CPI to rise above 2.5% in 2H18.”