Synopsis:

Credit Agricole projects a relatively positive July US CPI report, continuing the trend of inflation improvement seen in Q2 2024, albeit with a slight increase compared to June.

Key Points:

1. Headline CPI Forecast:

   • Expected to rise by 0.2% MoM in July, following a -0.1% MoM decline in June.
   • This would keep the YoY rate steady at 3.0%, with a slight possibility of rounding down to 2.9%.
   • The NSA index is forecasted to be at 314.752.

2. Core CPI Forecast:

   • Projected to increase by 0.2% MoM, with the YoY rate edging down to 3.2% from 3.3%.
   • The unrounded forecast is 0.18%, slightly higher than the 0.06% MoM print in June but still relatively low overall.
   • The three-month annualized core CPI is expected to drop to around 1.6%, a significant decrease from the 4.5% rate in March.

3. Core Goods and Services:

   • A second consecutive monthly decline in core goods is anticipated, in the range of -0.2% MoM in July, following a -0.1% MoM drop in June.
   • Core services are expected to rise by 0.3% MoM, up from 0.1% MoM in June, reflecting improvement compared to Q1 2024.

Conclusion:

Credit Agricole anticipates the July US CPI report to show continued signs of inflation easing, with modest increases in both headline and core inflation, signaling progress in the fight against inflation while staying relatively low overall.