TD Securities’ Macro Research team, led by Oscar Munoz and Molly Brooks, forecasts a stronger US inflation profile for August, with headline Consumer Price Index (CPI) expected to rise by 0.39% month-on-month. This projection follows a more modest 0.07% month-on-month increase in July, and is attributed to a rebound in both gasoline and food inflation. The team anticipates the first increase in gasoline prices since May, alongside an acceleration in food inflation, contributing to the headline figure [1].
For core CPI, which excludes volatile food and energy components, TD Securities projects a 0.24% month-on-month increase in August, slightly higher than the 0.22% recorded in July. This would align with a core Personal Consumption Expenditures (PCE) increase of 0.20%. The report notes that core goods prices are expected to decline after a rebound in July, particularly in tariff-exposed categories, though a jump in new vehicle prices may offset this trend [1].
Services inflation is projected to gain further momentum, driven by shelter costs, with both Owners’ Equivalent Rent (OER) and rents seeing firmer rises. Hotel rates inflation is expected to turn positive after declines in June and July, while strengthening airfares and vehicle insurance are also anticipated to lift inflation in transportation services. The overall profile points to persistent underlying price pressures, especially in the supercore measure, which focuses on services excluding energy and housing [1].
The TD Securities team emphasizes that these projections are preliminary and based on current assumptions, which may evolve as more data becomes available, particularly for volatile segments such as gasoline prices, hotel rates, and airfares [1].
CONCLUSION
TD Securities anticipates a stronger US inflation reading for August, driven by rebounds in gasoline, food, and services inflation. Persistent underlying price pressures could influence market expectations for future monetary policy, though the projections remain subject to revision as new data emerges.