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A Narrower Range For Early Core PCE Estimates In June

US OUTLOOK/OPINION
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[Excerpt from MNI's US CPI Preview - full report here]
  • With heighted uncertainty in non-PCE relevant categories this month, it’s perhaps not surprising that there’s a narrower range in analyst preliminary core PCE estimates ahead of tomorrow's US CPI release.
  • Nomura and MS, with the two widest views for core CPI at 0.135-0.27% M/M respectively, are instead much more tightly grouped with 0.17-0.23% M/M for core PCE. Goldman sit in the middle at 0.20% M/M.
  • This 0.20% mid-point would see an acceleration from the 0.08% M/M for core PCE in May (which surprised lower than already soft expectations) but it would mark a continuation of the reversal of the Q1 surge.
  • Specifically, it would see core PCE inflation of 2.2% annualized in Q2 vs the 4.5% in Q1 having bounced after the particularly soft 1.6% in 4Q23 and 2.2% in 3Q23.
  • This would no doubt boost the Fed’s confidence in being able to cut rates, but it will remain sensitive to upside surprises.
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[Excerpt from MNI's US CPI Preview - full report here]
  • With heighted uncertainty in non-PCE relevant categories this month, it’s perhaps not surprising that there’s a narrower range in analyst preliminary core PCE estimates ahead of tomorrow's US CPI release.
  • Nomura and MS, with the two widest views for core CPI at 0.135-0.27% M/M respectively, are instead much more tightly grouped with 0.17-0.23% M/M for core PCE. Goldman sit in the middle at 0.20% M/M.
  • This 0.20% mid-point would see an acceleration from the 0.08% M/M for core PCE in May (which surprised lower than already soft expectations) but it would mark a continuation of the reversal of the Q1 surge.
  • Specifically, it would see core PCE inflation of 2.2% annualized in Q2 vs the 4.5% in Q1 having bounced after the particularly soft 1.6% in 4Q23 and 2.2% in 3Q23.
  • This would no doubt boost the Fed’s confidence in being able to cut rates, but it will remain sensitive to upside surprises.