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USD-flation Watch: Not a disinflationary home run as in Europe

Black month trends look less extreme in the US and in some categories, price pressures have even increased markedly versus November last year. We see inflation risks clearly tilted to the upside of consensus.
2023-12-11

We see US inflation printing roughly 0.15%-points above consensus tomorrow driven by upside surprises in apparel prices, medical care services and used car prices. This remains in sharp contrast to trends in Europe where inflation softens faster than expected. The upside will be seen in both headline -and core inflation.

Let’s have a look at the details ahead of the release tomorrow.

Looking at the monthly trends in US inflation over the past months, we notice how energy- and used cars played a big role in getting headline inflation to 0.0% MoM (in rounded figures) in October. Contributions from gasoline will be smaller than in October, while they will be larger from Diesel, but net/net energy will deliver LESS deflation than in October.

Chart 1: Smaller deflation contribution from Gasoline than in October

Black month trends look less extreme in the US and in some categories, price pressures have even increased markedly versus November last year. We see inflation risks clearly tilted to the upside of consensus.

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