MNI DATA PREVIEW: US Inflation Seen +0.3%, Core Up 0.2%

By Brooke Migdon

     WASHINGTON (MNI) - U.S. consumer prices are expected to increase steadily

in December with a Bloomberg survey median calling for a 0.3% increase, matching

an unexpectedly strong November number.

     Gasoline prices, which account for 4% of the CPI basket, rose in December,

which should keep m/m energy prices steady after decelerating 0.8% in November.

December electricity prices also increased, supporting a stable gain in overall

energy prices.

     Like headline inflation, December core CPI is expected to match November's

0.2% gain (Blomberg median). The rising price of clothing and medical care,

bolstered by strength in health insurance, should offset any drag from falling

used vehicle prices this month.

     The forecasted increase in headline and core CPI is expected to leave

annual core inflation tracking at 2.3%, matching both November and October's

pace. Headline inflation is also expected to hold steady at 2.1%, just above the

Fed's 2% PCE inflation target, and the fastest since November 2018.

     The Fed is likely to welcome inflation rising above target, but it would

require a "lengthy and decent overshoot" of the 2% goal before considering a

rate hike, economists at ANZ research wrote in a research note.

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

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