US CPI & Initial jobless claims reviewed - Nomura

Analysts at Nomura noted that the Headline CPI rose only slightly by 0.1% (0.059%) m-o-m in September, below expectations (Nomura: 0.192%, Consensus: 0.2%).

Key Quotes:

"Among the non-core components, energy service prices such as electricity (-0.5%) and utility gas services (-1.7%) came in a little weaker, but food prices (0.03%) and gasoline prices (-0.214%) were broadly in line with our expectations."

"Core CPI inflation came in at 0.1% (+0.116%) m-o-m, below expectations (Nomura: 0.244%, Consensus: 0.2%), driven by a sharp decline in used vehicle prices and a slowdown in homeowners’ equivalent rent inflation."

"On a y-o-y basis, core CPI inflation remained at 2.2% (2.170%), below expectations (Nomura: 2.304%, Consensus: 2.3%) but essentially unchanged from 2.199% in the previous month."

Initial jobless claims:

"Initial jobless claims increased marginally by 7k to 214k for the week ending 6 October, remaining within a low range as the labor market strengthens further. However, Hurricanes Florence and Michael may introduce additional volatility into jobless claims data over the next few weeks."

GDP tracking update:

"Today’s CPI report was somewhat weaker than expected and we lowered our forecast for Q3 PCE inflation, implying more real PCE growth. However, after rounding, our Q3 real GDP tracking estimate remains at 3.7% q-o-q saar."