Core CPI Soft for Second Straight Month; Initial Claims Jump

BOTTOM LINE: The core Consumer Price Index (CPI) for July increased by 0.16%, which was in line with the slow pace seen in the previous month and 4 basis points below what was expected by consensus.

BOTTOM LINE: The core Consumer Price Index (CPI) for July increased by 0.16%, which was in line with the slow pace seen in the previous month and 4 basis points below what was expected by consensus. The year-on-year growth rate decreased by one tenth to reach 4.7%. The components of the index showed some improvement, although the monthly core reading was dampened by a significant 6 basis point drop in airfare prices, which was an unexpected decline. Looking beyond that, the overall report indicated positive trends in terms of disinflation. Inflation in the rental sector continued to decelerate, categories related to services sensitive to wage changes displayed some softness overall, and the 1.3% decrease in used car prices is likely the initial phase of a more substantial retreat.

The findings of this report make it even less likely that there will be an interest rate hike in September, aligning with Goldman Sachs beliefs that the Federal Open Market Committee (FOMC) will conclude that a final increase is not necessary during the November meeting. I maintain my projection that the policy will have one more increase for the remainder of the year. Additionally, initial jobless claims experienced a rise of 21,000 to reach 248,000, surpassing the expectations of consensus.

MAIN POINTS:

1. July core CPI rose 0.16% (MoM), 4bp below consensus and matching the previous reading as the lowest since February 2021. I believe residual seasonality in travel categories weighed on the core reading, and I expect a partial reversal of the 8.1% decline in airfares in coming months. Apparel prices were unchanged, also likely reflecting a drag from residual seasonality. Outside of that, the report was broadly encouraging from a disinflation perspective. Rent inflation slowed further (+0.42% vs. 0.46% in June and the spring monthly trend of just over 0.5%), and I believe the rebound in OER (+0.49% vs. +0.45% in June) reflects a temporary boost from imputed utilities. Auto prices fell (new -0.1%, used -1.3%), and I expect additional declines in August and beyond due to the pullback at the wholesale level. Wage-sensitive services categories were softer on net, including hospitals (-0.4%), other personal services (-0.1%), and the smallest gain among restaurants since March 2021 (+0.2%, “food away from home” category). Nursing homes (+2.4%) was a notable exception. Also of note, car insurance rates rose 2.0% as carriers continue to pass through the lagged impact of higher used car prices and auto repair costs. Inflation breadth softened a bit further in July, with the Cleveland Fed’s trimmed monthly CPI inflation at +0.21% month-over-month and 4.8% year-over-year, compared to +0.22% and 5.0% respectively in June. Headline CPI rose 0.17%, as food prices rose 0.2% and energy prices rose 0.1%. Within energy, a 2.0% rise in piped gas and 0.2% rise in gasoline prices more than offset a 0.7% pullback in electricity prices.

 Source: Finlogix Economic Calendar 

2. Initial jobless claims increased 21k to 248k in the week ended August 5, above consensus expectations for a 3k increase. The four-week moving average of claims edged up by 3k to 231k. Two distortions that likely boosted initial claims over the last few months—potentially fraudulent filings in Ohio and expanded eligibility for unemployment insurance in Minnesota—appeared to intensify in Friday’s report. Those two states accounted for 35k initial claims (vs. 28k in the prior week and 14k in late May; SA by GS). After adjusting for those distortions, initial claims still increased week-over-week (+14k) though remained near the lower end of the range seen between March and July. I suspect that non-union workers at Yellow (8k of their 30k employees) who were laid off last week may have contributed modestly to this week’s increase in initial claims. 

 Source: Finlogix Economic Calendar 

3. Nationwide continuing claims—the number of persons receiving benefits through standard programs—fell by 8k to 1,684k in the week ended July 29, slightly below consensus expectations. Ongoing seasonal distortions have likely weighed on continuing claims over the last few months, and I estimate they could exert a cumulative drag on the level of continuing claims of 375k between April and September. 

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

Düzenleme: ASIC (Australia), FSCA (South Africa)
read more
ATFX Economic Calendar- 2025.07.07~2025.07.11

ATFX Economic Calendar- 2025.07.07~2025.07.11

The ATFX Weekly Economic Calendar is a comprehensive resource designed to help traders and investors stay ahead of market-moving events. It outlines key economic data releases, central bank meetings, speeches, and geopolitical events for the week. This calendar provides a strategic tool for navigating global markets, offering insights into potential volatility triggers across multiple asset.
ATFX | 20 dakika önce
ATFX Market Outlook 7th July 2025

ATFX Market Outlook 7th July 2025

U.S. dollar weakened against major currencies after President Trump’s landmark tax cut bill was passed, amid mounting pressure on countries to strike trade deals with Washington. As markets brace for the July 9 tariff deadline—targeting countries like Japan that have yet to reach agreements—the dollar index slipped 0.1% to 96.92.
ATFX | 1s 43 dakika önce
Why Silver could be the precious metal of 2025

Why Silver could be the precious metal of 2025

The gold bar is metallic yellow and slightly behind the silver bar, which is metallic white and positioned in front. Gold may still be the headline act, but silver’s no longer content playing second fiddle. In 2025, silver isn’t just glittering - it’s surging forward as one of the most exciting metals on the market.
Deriv | 2 gün önce
Risk-on sentiment fades as tariffs return to the spotlight 

Risk-on sentiment fades as tariffs return to the spotlight 

Dollar surrenders gains posted after robust labour market report; Trump celebrates US budget bill approval; scheduled to sign it today; Most Fed members feel more comfortable as July rate cut is priced out; Oil steadies near $66, gold rally retains momentum;
XM Group | 2 gün önce
ATFX Market Outlook 4th July 2025

ATFX Market Outlook 4th July 2025

The U.S. economy added 147,000 jobs in June, beating expectations of 110,000, while the unemployment rate fell to 4.1%. Traders are now betting that the Fed is unlikely to cut rates before September. Meanwhile, the House narrowly passed Trump's major fiscal bill by a vote of 218 to 214. U.S. stocks rallied on Thursday, hitting fresh record highs.
ATFX | 3 gün önce
Nonfarm payrolls take center stage

Nonfarm payrolls take center stage

Slide in US private payrolls raise concerns about NFP miss - US strikes trade deal with Vietnam ahead of July 9 deadline - Pound feels the heat of fiscal shenanigans - S&P 500 hits fresh record high ahead of jobs report
XM Group | 3 gün önce