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US Jan CPI likely to see another soft result - Westpac

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 19, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Research Team at Westpac, suggests that the US inflation narrative has had a constant refrain over the past year, with the trend decline in the price of oil acting as a persistent deflationary force. At December, annual headline inflation stood at just 0.7%.

    Key Quotes

    “Come January, we are likely to see another soft result circa –0.1%, again owing to the price of oil. However its deflationary influence is abating: the annual pace of inflation should jump
    from 0.7% to around 1.3% in January.

    Core inflation (excluding energy and food) has remained much more robust in recent months around 2.1%yr. A 0.2% gain in January should sustain the annual pace at this level.

    Key to the core inflation trend is persistent growth in the price of services, most notably for rents and recreational services, but also health care and insurance. Against this, the strong USD is resulting in deflation for ex energy goods.”
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