US: CPI to show a modest rebound in July - Wells Fargo

Next week, the key economic report from the US will be July inflation data. Analysts from Wells Fargo, expect the CPI to show a 0.2% gain, in line with market consensus.

Key Quotes: 

“Consumer prices were flat in June, extending the soft patch for inflation indicators. The consumer price data have shown that consumers paid less on a range of products and services in recent months, from home furnishings to cell phone plans. Lower gasoline prices have also been a boon to consumer wallets. However, the extra spending power appears to have had little effect on consumption decisions. Personal spending growth slowed in Q2 relative to Q1, and was flat on an inflation-adjusted basis in June.”

“Headline and core CPI are slipping farther from the Fed’s 2 percent year-over-year growth target. Inflation and wages have put the Fed in a tough position, and the continued miss on price growth indicators caused us to push back our call for the third rate hike this year to December.”