19 Aug 2015
US CPI expected to come in firm – Societe Generale
FXStreet (Edinburgh) - Kit Juckes, Strategist at Societe Generale, sees US consumer prices extending their solid performance seen in recent periods.
Key Quotes
“Before we get to the FOMC minutes, the US releases CPI inflation data for July. A 0.2% increase is expected in both core and headline, taking annual headline inflation to 0.2% from 0.1% and the keeping the core at 1.8%”.
“Long after this cycle is over, the stability of both core CPI and wage growth in the US, in both the post-2008 downturn and the subsequent recovery, will be a huge source of debate”.
“For now though, there will be plenty of people to say that the lack of any upward pressure to inflation justifies keeping rates at current levels for longer (and I shall continue to disagree strongly)”.
“Meanwhile, the release of real weekly earnings growth, likely to pick up to 2.1% y/y, is a stark reminder of the improved firepower available to US households”.
“If real wages are growing at over 2% per annum and employment is growing at 2.1% too, that’ s a lot of spending power, even for a more circumspect consumer”.
Key Quotes
“Before we get to the FOMC minutes, the US releases CPI inflation data for July. A 0.2% increase is expected in both core and headline, taking annual headline inflation to 0.2% from 0.1% and the keeping the core at 1.8%”.
“Long after this cycle is over, the stability of both core CPI and wage growth in the US, in both the post-2008 downturn and the subsequent recovery, will be a huge source of debate”.
“For now though, there will be plenty of people to say that the lack of any upward pressure to inflation justifies keeping rates at current levels for longer (and I shall continue to disagree strongly)”.
“Meanwhile, the release of real weekly earnings growth, likely to pick up to 2.1% y/y, is a stark reminder of the improved firepower available to US households”.
“If real wages are growing at over 2% per annum and employment is growing at 2.1% too, that’ s a lot of spending power, even for a more circumspect consumer”.