US: Core PCE likely to decelerate in October - TDS

Analysts at TD Securities are expecting the US core Personal Consumption Expenditures Index (PCE Index) to decelerate in October to 1.9% y/y.

Key Quotes

“We see downside risks for October PCE, with core printing at 0.1% vs the 0.2% rise in core CPI (market: 0.2% m/m, 1.9% y/y).”

“Different weightings and muted healthcare services are likely to blame for the underperformance. That should allow core inflation to soften to 1.8% y/y, an 8-month low, and leave tracking at 1.9% for Q4.”

“On the flip side, spending should hold strong at 0.4%, supportive of Q4 real PCE in the 2.5-3.0% range.”