GS With A Consensus CPI Call

Goldman see core CPI at +0.48% M/M in July (cons. 0.5%) after +0.7% to boost the year-on-year rate by two tenths to 6.1% Y/Y.

• It reflects a 7% pullback in airfares on the back of lower oil prices and a 0.8% drop in apparel prices from markdowns on excess inventory.
• On the flip side, there should be continued increases in auto prices (new +1.0%, used +0.5%, parts +0.8%) due to the Ukraine-Russia war plus upward pressure on personal care, recreation and household operations from labor shortages and elevated short-term inflation expectations.
• Importantly, they expect another set of very strong shelter readings (rent +0.70% and OER 0.67%), reflecting additional catch-up in the official measures relative to our shelter tracker but an OER drag from imputed utilities, along with another gain in car insurance.
• Headline CPI is eyed at +0.24% M/M (cons 0.2%) from lower gasoline prices despite higher grocery and restaurant prices.