The 0.1% July CPI headline and core price gains
The 0.1% July CPI headline and core price gains both slightly undershot estimates, with a 0.1% energy price downtick instead of an expected small uptick, a 0.2% food price rise, and additional core price declines of 0.5% for new vehicles that left a sixth consecutive drop, and of 0.1% for tobacco. The headline figures rounded from lean gains of 0.106% for CPI and 0.114% for the core. Analysts expect a 0.2% August headline CPI rise with a 0.1% core increase with a lift from gasoline. The headline y/y increase should rise to 1.8% from 1.7% in July and 1.6% in June, but a higher 1.9% in May, while the "core" y/y rise slides to 1.6% from 1.7% over the three months ending in July. Analysts expect 0.1% headline and core PCE chain price gains that match today's CPI data. Analysts expect a 0.4% July nominal consumption rise with a 0.3% "real" increase, with an expected lift from an assumed 0.4% July retail sales rise with a 0.3% ex-auto gain. Our 3.3% Q3 GDP growth forecast after an assumed trimming in Q2 growth to 2.3% from 2.6% includes "real" consumption growth of 2.3% (was 2.2%) in Q3 after 2.8% growth in Q2.