Goldman Sachs Forecasts Strong August Core CPI Increase

Goldman Sachs has released its forecast for the upcoming US August inflation report, which is due to be published on Friday. According to GS Research, core CPI is expected to increase by 0.23% in August, compared to a consensus of +0.2%, resulting in a year-over-year rate of 2.40%. Headline CPI is predicted to rise by 0.39%, exceeding the expected +0.4% consensus, driven by higher energy prices.

GS notes that its forecast aligns with a similar increase in core PCE of 0.22% in August. Looking ahead, the firm anticipates monthly core CPI increases of approximately 0.2% for the next few months, reflecting a continued slowdown in shelter categories and diminishing impacts from tariff-related price hikes.

However, GS also cautions that risks are tilted to the upside if disruptions to oil markets persist and associated oil price increases prove more substantial than anticipated.