US CPI inflation rate had risen just 0.09% in March, whereas the core rate rose only 0.07%. The core rate is likely to improve in April. The core rate is expected to have risen by 0.14%, said Societe Generale in a research report. However, overall there are certain risks on the downside to the forecast due to the likelihood of constant weakness in many goods components.
Considerable fluctuations in prices of many goods categories was mainly responsible for the weakness in March’s core rate. Apparel dropped 1.1% after rising largely in January and February. Prices of apparel are expected to have been flat in April; however, there is certain downside risk to this measure, added Societe Generale.
In March, prices of used car also declined 0.1% after increasing for four consecutive months. It is likely to have fallen 0.2% last month. Meanwhile medical care is expected to have come back to a trend-like 0.2% rate in April after rising 0.1% in March.
“The y/y headline CPI likely rebounded from 0.9% to 1.1%, while the core rate may have slipped from 2.2% to 2.1%”, noted Societe Generale.
The material has been provided by InstaForex Company – www.instaforex.com