CPI data from the US due at 1330GMT on Wednesday 13 February 2019


  • Retail gasoline prices slipped -5% sequentially in January and this is feeding into a seasonally adjusted decline in energy of about -1% on the month. This should weigh on headline CPI. That said, firm demand-as evidenced by strong chain-store sales and very healthy income growth (production worker aggregate wages were near 6% y/y in Jan)- should help boost core prices by a relatively robust 0.3%. This leaves the headline at about 0.2% even with the headwind from energy. Tough year-ago comps will still drive year/year headline inflation to a fresh nearby low of about 1.6% (down from 1.9% y/y prior). This is a phenomenon likely to remain in place for a few months and we currently see inflation bottoming at 1.4% y/y in March before turning higher.


  • We expect core CPI inflation at 0.2%MM and headline at 0.1%MM.
  • Core CPI rose 0.21%MM in December and headline CPI fell 0.1%MM. Core CPI in December came in largely as we had expected, with some bounce-back in certain transitory components and largely-unchanged inflation rates in other components supporting Fed plans to be "patient.

Morgan Stanley:

  • We expect core CPI to rise 0.20% in January, right in line with its three-month average.
  • Falling oil prices should cause headline CPI to rise just 0.06% after a 0.06% drop in December.
  • A print in line with our forecasts would lower core CPI to 2.1% on a year-over-year basis from 2.2% in December.
  • Headline CPI should fall for the fourth consecutive month on an annual basis, to 1.5% from 1.9%.