It is widely expected in the market that the US Personal Consumption Expenditures (PCE) Price Index for July will increase by 0.2% month-on-month. The core PCE index is also predicted to record the same monthly increase, while the core PCE year-on-year rate might rise from 4.1% to 4.3%.
Credit Suisse’s expectations align closely with market consensus. The bank believes that the July PCE data is likely to validate the inflation easing trend that was observed in the July Consumer Price Index (CPI) report.
Anticipating a gradual moderation in housing prices over the coming months, Credit Suisse suggests that this should impact the growth of the PCE. However, given that housing holds less weight in PCE data compared to CPI, and progress in other core services (with higher weight) has been limited, PCE data might exhibit more stickiness later in the year compared to CPI data.
