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Jan 09 - 02:55 PM

Goldman Sachs: Here is What we Expect from this Week's US CPI Print?

By eFXdata  —  Jan 09 - 12:45 PM

Synopsis:

Goldman Sachs provides forecasts for the December Consumer Price Index (CPI) in the US, detailing expected changes in core and headline CPI and the factors influencing these predictions.

Key Insights:

  1. Core CPI Increase Forecast:

    • Goldman Sachs estimates a 0.27% increase in core CPI for December. This would lead to a slight decrease in the annual rate, bringing it down to 3.9%.
  2. Headline CPI Rise:

    • The headline CPI is projected to rise by 0.29%, influenced primarily by increases in energy (+0.4%) and food prices (+0.4%).
  3. Specific Price Movement Predictions:

    • A significant 5% increase in airfares is anticipated.
    • Auto prices are expected to decline (new cars -0.2%, used cars -1.1%).
    • Apparel prices may continue to soften (-0.3%), attributed to larger holiday discounts.
    • Car insurance rates are forecasted to increase moderately (+0.6%).
  4. Rent and Owner's Equivalent Rent (OER) Projections:

    • Estimates suggest a +0.45% increase for both rent and OER.

Conclusion:

Goldman Sachs’ analysis provides a detailed look at the expected CPI figures for December, underscoring the nuanced interplay of various market factors. The forecast highlights specific sectors such as transportation and housing, indicating a mixed picture of price changes across different categories. These insights are crucial for understanding the broader inflationary landscape and its potential impact on economic policy and market reactions.

Source:
Goldman Sachs Research/Market Commentary

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