WASHINGTON: Prices for US goods and services have probably risen at a slower pace after two particularly uncomfortable months for American consumers.
The consumer price index (CPI) for October was seen rising 0.3% after a 0.6% increase that was the largest since April, based on the median projection in a Bloomberg survey of economists ahead of today’s Bureau of Labour Statistics’ release.
The core measure, which excludes often-volatile energy and food components, also probably cooled.
The survey median sees a 0.2% increase for October, which would be the smallest advance in three months.
The agency won’t publish year-on-year figures after it skipped the October 2025 CPI release due to the federal government shutdown at the time.
The October CPI will be the last before the Federal Reserve’s (Fed) meeting in December, at which investors expect policymakers to boost interest rates. Economists will assess the finer details of the report for clues on inflation risks into early 2027.
Economists at Citigroup Inc said in a recent note that they anticipate limited pass-through of high energy costs to goods prices, as well as moderate services inflation.
“We expect headline CPI slowed to 0.25% in October (versus 0.65% prior). The core likely softened to 0.24% (versus 0.33% prior), with both softer goods and services price gains driving the improvement.
“For goods, used cars and consumer electronics – categories that have faced pressure from the artificial intelligence (AI) boom – saw slower inflation. For services, gains in owners’ equivalent rent are down a third from a September spike,” said Bloomberg Economics.
The latest snapshot of inflation also follows last Friday’s stronger-than-expected October jobs report.
Sustained employment growth has the potential of ensuring consumers keep spending, while allowing the Fed to keep its focus squarely on inflation.
Another price report, due on Friday, is projected to show nagging inflationary pressures faced by companies.
The producer price index is forecast to accelerate to 6.6% for the year through October, the steepest annual increase in nearly four years.
Aside from inflation reports, National Association of Realtors figures last Thursday are expected to show a decline in contract closings on previously owned homes to the lowest level since 2010 as mortgage rates stay elevated.
In Canada, September manufacturing and wholesale reports are expected to reflect a slowdown in third-quarter economic growth. Manufacturing sales likely rose just 0.1% that month, against 1.5% the month earlier.
That may be partly due to an unexpected work stoppage at US auto plants that dampened cross-border auto trade.
Wholesale sales, excluding petroleum, likely increased slightly, by 0.5%, against a 1.6% decline the month before.
Meanwhile, the Bank of Canada will release a summary of the deliberations that led to its first rate hike in three years.
Elsewhere, inflation data from China to Norway, central-bank minutes from Japan to Sweden, and growth data in the United Kingdom are among the highlights.
The week kicked off with Australian housing data last Sunday revealing that home sales and auction clearance rates climbed and offering hopes of a recovery for a property market that has slumped as interest rates rose this year.
Inflation updates from China may show consumer price gains have slowed a tad in October, to 0.8%, as sectors outside energy and AI remain sluggish. — Bloomberg
