US core PCE inflation likely to be steady at 0.2% m-o-m - Nomura

Based on relevant CPI and PPI data, analysts at Nomura forecast US core PCE inflation to be steady at 0.2% m-o-m (0.218%) gain.

Key Quotes

“This translates into to 1.5% (1.46%) y-o-y growth, unchanged from the previous month after rounding. Among the elements relevant for core PCE price from the PPI report, the price indices for hospital, home healthcare and nursing care facility services all increased relatively strongly. This suggests a pick-up in health care prices will likely push up core PCE inflation in January.”

“For the PCE food price index, we expect a modest 0.1% m-o-m increase, reflecting CPI food-at-home prices which rose by only a weak 0.1%. For PCE energy price index, we expect a strong increase, after incorporating a 3.0% m-o-m jump in CPI energy prices. Altogether, our topline PCE price index forecast is 0.3% (0.329%) m-o-m, which would be equivalent to 1.6% y-o-y growth.”