The price rebound of used cars and other commodities has little impact, and the September CPI data in the United States may further indicate a decline in inflation

According to the information obtained from the Wise Finance APP, economists predict that despite price pressures on certain categories of goods such as used cars, the key inflation indicators in the United States are expected to slow down in September.

Based on a survey of economists, the Consumer Price Index (CPI) and the core CPI excluding food and energy may rise by 0.1% and 0.2% in September, respectively. In both cases, the monthly growth rate is expected to decrease compared to August.

On an annualized basis, the overall CPI is expected to increase by 2.3%, the lowest growth rate since the beginning of 2021. The core CPI is expected to increase by 3.2% year-on-year for the second consecutive month.

If the data aligns with expectations, it is unlikely to have a significant impact on the Federal Reserve's policy decision in November.

Anna Wong, Chief U.S. Economist at Bloomberg Economics, wrote in a report on Thursday, "Even if core CPI unexpectedly rises, we do not believe that the September report will change the FOMC's view of declining inflation." She expects that following the half-point rate cut by the Federal Open Market Committee (FOMC) last month, rates will be cut by another 25 basis points in November.

Commodity Prices

Most forecasters believe that after several months of decline, used car prices will rebound. This will put pressure on core commodities, as core commodity prices have fallen in 14 out of the past 15 months.

Economists at Pantheon Macroeconomics suggest that looking ahead, the rise in container shipping prices may have an impact on this category.

"Transport costs will impact the CPI with a lag of at least six months," wrote Samuel Tombs and Oliver Allen on Tuesday. "Therefore, in the coming months, the impact of the nearly doubling of container freight rates earlier this year may gradually feed through to core commodity prices in the CPI."

PCE Impact

The increase in used car prices is bad news for consumers, especially with the continued high prices of car insurance. However, this will not have a significant impact on the Personal Consumption Expenditures Price Index (PCE), a key inflation indicator favored by the Federal Reserve. The index has been close to the Fed's 2% target.

Diego Anzoategui, an economist at Morgan Stanley, wrote last week, "Used cars have a low weight in core PCE, so their accelerated growth has a small impact on PCE. Used cars account for about 2% of the CPI basket, compared to 1.2% in the PCE basket."

Generous Salaries Economists say another upside risk to inflation comes from wages, which are a key driver of consumer spending. In August, the annual real income growth rate hit a new high in a year. With nearly 50,000 dockworkers receiving significant pay raises through negotiations and 33,000 Boeing employees currently on strike to reach an agreement, inflationary pressures could be even greater.

Citigroup economists Veronica Clark and Andrew Hollenhorst wrote in a report on Tuesday, "Continued strength in wages will pose a clear upside risk to inflation, especially in sectors such as healthcare services."