Free Trial

US INFLATION: CORRECT - Import Airfares Could Bias Core PCE Estimates Yet Higher

US INFLATION

REPUBLISHED WITH CORRECT OCTOBER AIRFARES FIGURE (3.9%): The rise in import air passenger fares - the key input from the Import/Export price report into the Fed's preferred PCE gauge - came in at 3.9% M/M in October after 13.9% prior.

  • Note that this is a non-seasonally adjusted series, but this is a faster increase than in 2023, which combined with September's strong outturn suggests that there could be another upward bump to core PCE estimates (albeit a very small one). See chart.
  • Coming into today, post-CPI/PPI core PCE estimates were as follows (was 0.25% M/M in September) - note Fed Chair Powell said Thursday that core PCE was estimated to come in at 2.8% Y/Y in October, roughly consistent with a M/M reading in the high 0.2s/low 0.3s%:
    • BofA: 0.25%
    • Goldman Sachs: 0.26%
    • JPMorgan: 0.31%
    • TD: 0.31%
    • Note that after CPI but prior to PPI, expectations had been centered in the  0.21-0.25% area.
146 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

REPUBLISHED WITH CORRECT OCTOBER AIRFARES FIGURE (3.9%): The rise in import air passenger fares - the key input from the Import/Export price report into the Fed's preferred PCE gauge - came in at 3.9% M/M in October after 13.9% prior.

  • Note that this is a non-seasonally adjusted series, but this is a faster increase than in 2023, which combined with September's strong outturn suggests that there could be another upward bump to core PCE estimates (albeit a very small one). See chart.
  • Coming into today, post-CPI/PPI core PCE estimates were as follows (was 0.25% M/M in September) - note Fed Chair Powell said Thursday that core PCE was estimated to come in at 2.8% Y/Y in October, roughly consistent with a M/M reading in the high 0.2s/low 0.3s%:
    • BofA: 0.25%
    • Goldman Sachs: 0.26%
    • JPMorgan: 0.31%
    • TD: 0.31%
    • Note that after CPI but prior to PPI, expectations had been centered in the  0.21-0.25% area.