MNI DATA PREVIEW: Headline CPI Seen +0.2%, Core Up 0.2%

By Brooke Migdon

     WASHINGTON (MNI) - U.S. consumer inflation is expected to slow in November,

with Bloomberg's survey of analysts pointing a 0.2% increase, decelerating from

October's 0.4% gain that was the fastest pace in seven months. Core CPI is also

expected see a 0.2% increase.

     Gasoline prices, which account for 4.0% of the total CPI basket, likely

fell in November and should hold down headline inflation. But food prices, which

are expected to extend recent gains this month following a 0.2% spike in

October, could offset some weakness in the headline number caused by energy

prices.

     Core inflation is expected to rise by 0.2% (Bloomberg median) in November,

matching October's increase. Apparel prices, which fell 1.8% in October, should

rebound in November, but healthcare costs, a primary driver of core inflation

growth last month, are expected to soften.

     --WAGES, TARIFFS

     Slowing wage growth could hold down core inflation, with average hourly

earnings increasing by 0.2% in November after rising by 0.4% in October.

Year-on-year wages also dropped off slightly, posting a 3.1% gain in November

after growing 3.2% in October, signalling potential declines in core CPI

components.

     The impact of tariffs on prices of consumer goods, such as apparel and

footwear, could be seen in next month's data should U.S. President Donald Trump

decide to impose another round of tariffs on imported Chinese products beginning

Dec. 15, though some outlets have reported that those tariffs are likely to be

delayed as the two nations try to reach a "phase one" trade agreement.

     The forecast on month increase in headline and core CPI is expected to

leave annual core inflation tracking at approximately 2.3%. Headline inflation,

however, could accelerate slightly to 2.0%, in line with the Fed's 2.0% PCE

inflation target.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUPR$,M$U$$$]