Fall in energy futures prices lowers US CPI forecast profile

US CPI inflation data is scheduled to release on 19th August. 

Barclays has revised down their CPI profile from last update on July 17. Since then, energy futures prices have moved sharply lower as the price of crude oil has plummeted. The latest spot and futures prices available suggest that the seasonally adjusted energy component of CPI will drag on monthly headline CPI readings through Q1 of next year. 

Barclays estimates, "Our CPI NSA index forecast is now an average of 0.5pts lower across the forecast horizon from our last update. Headline CPI is expected to have risen 0.2% m/m (sa) and 0.2% y/y (nsa)."

The increase in headline inflation is expected to be driven primarily by an increase in core CPI, with a roughly neutral contribution from seasonally adjusted energy and food prices on the month.

According to Barclays, "The core CPI is expected to rise 0.2% m/m (sa) and 1.9% y/y (nsa). Looking ahead, we expect continued firming in core inflation, which should translate into a brisk pickup in headline inflation by mid-2016 as the drag from energy prices fades."