US: Headline CPI to rebound - Wells Fargo

On Thursday, April CPI inflation data will be released in the US. Analysts at Wells Fargo, expect the index to show an increase of 0.3% in the headline and 0.2% in the core.

Key Quotes:

“We expect headline CPI to rebound 0.3 percent in April after a gasoline induced decline in March. That should push the year-ago change up to 2.5 percent.”

“Core inflation is likely to print 0.2 percent for a third straight month.”

“We view the risk to that call as lying to the downside, however, with an expectation that April will be a “low” 0.2 percent gain. Nevertheless, the core CPI should rise to 2.2 percent year over year.”

“Unlike recent months, we do not expect the latest seasonal adjustment factors or residual seasonality to have a meaningful impact to the core index. Over the past five years, the core index has increased an average of 0.148 in April, only modestly lower than the 0.156 percent average change for all months.”