US | Core inflation rose less than expected in Oct …

Summary

In October, U.S. CPI dropped to 3.2% YoY, a 0.5% decrease driven by stable headline inflation, lower-than-expected core print, and reduced housing and energy prices. Anticipating continued cooling, 4Q is expected to average 3.4% YoY for headline inflation and 4.0% for core inflation.

Key points

• Key points:
• Accumulated inflation is now well below the trend of the past two years, while core inflation is now running c. 2 pp last year’s trend.
• Gasoline prices decreased by (-)21.4%, emerging as the primary contributor to the monthly decline of energy prices.
• Core inflation, housing-related prices, the component with the greatest weight, finally exhibit a more pronounced deceleration. In October Owners' Equivalent Rent of Residences prices slowed down with a monthly variation of only 0.4%, 0.2 pp less than the previous month's increase.
• Transportation services exhibited the highest growth (9.3% YoY) in core components, driven by a jump in motor vehicle insurance prices.
• The 3-month annualized sticky core measure shows short-term stickiness.

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