US: Consumer inflation in the process of accelerating - Westpac

Analysts at Westpac suggest that the US consumer inflation is in the process of accelerating, as base effects from March–May 2017 drop out.

Key Quotes

“These weak outcomes of 2017 were due to a number of 'one-off' or 'transitory' shocks related to the pricing of mobile phone plans and physician services. These factors were responsible for the lift in annual core inflation from 1.9% in February to 2.1% in March, and further gains are expected.”

“From March to April, no change is expected in the growth rate, with another 0.2% increase forecast. This is the pace that inflation has averaged since August 2017.”

“Headline inflation will however be whipped around on a month to month basis, with March's –0.1% result followed by a 0.3% gain as energy prices jump.”

“It remains our expectation that inflation will settle near 2.0% on a core basis in the second half of 2018.”