US CPI Preview: July 2023
US CPI Preview: July 2023
For the first time since June 2022, I expect annual CPI growth to rise in July, but I forecast that the core CPI will keep moderating.
Executive summary
For the first time since June 2022, I expect the annual rate of CPI inflation to increase, rising from 3.0% in June, to 3.2% in July (vs 3.3% consensus).
In contrast to the expected rise in the headline CPI, I expect the core CPI to fall to 4.6% (vs 4.8% consensus), down from 4.8% in June.
On a spot market rent adjusted basis, I expect headline CPI growth of just 0.5% YoY (vs 0.5% in June), and core CPI growth of 1.2% (vs 1.6%) in June.
With wholesale used car prices having recorded several months of significant declines, I expect this to begin flowing through to CPI used car and truck prices in July.
Annual food price growth is expected to continue moderating, with food at home price growth expected to moderate to 3.4% YoY.
The CPI energy commodities index is expected to see its significant YoY decline moderate in July, but the bulk of the impact of the recent rise in gasoline prices (should it continue) is expected to be seen in August’s CPI report, not July’s.
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