US CPI Preview: September 2023

Annual headline CPI inflation is expected to be broadly flat, but core inflation is expected to record its 6th consecutive month of deceleration.

Executive summary

For September, I forecast headline CPI growth of 3.7%, unchanged from the prior month. While this is slightly above the consensus forecast of 3.6%, to two decimal places, my forecast is 3.67%, indicating that a rounded reading of 3.6%, also has a material chance of occurring.

For the core CPI, I expect annual growth of 4.1%, down from 4.3% in August and in-line with the consensus forecast. This would represent the sixth consecutive month of decelerating annual core CPI growth. To two decimal places, my forecast is 4.14%, indicating the potential for core CPI growth to come in at a rounded 4.2%, which would be slightly above the consensus estimate.

For both the headline and core CPI, I expect MoM growth to be largely in-line with their respective historical averages for September.

While gasoline prices drove the CPI higher in August, the two categories that are most likely to be the key swing factors in September, are used car and truck prices, and airline fares.

While pri…