Goldman Sachs US November CPI Preview: Core CPI is expected to increase by 0.28% month-on-month, lower than market expectations

The U.S. Bureau of Labor Statistics will release the U.S. November CPI data on Wednesday, December 11. Goldman Sachs recently published a research report stating that it expects the U.S. November core CPI to rise 0.28% month-on-month, lower than the market consensus expectation of 0.3%, with a year-on-year growth rate of 3.27%, also below the market consensus expectation of 3.3%.

Goldman Sachs expects the overall U.S. CPI in November to rise 0.28% month-on-month, lower than the market consensus expectation of 0.3%. Among them, food prices are expected to rise 0.25%, and energy prices are expected to rise 0.3%. Goldman Sachs predicts that the November core service prices (excluding rent and owners' equivalent rent) will rise 0.20%, consistent with the forecast of a 0.20% increase in core PCE.

Goldman Sachs listed three key sub-item trends in the report. Among them, after a 2.7% increase in October, Goldman Sachs expects used car prices to continue to rise strongly in November, with an increase of 2.0%, reflecting the continued transmission of rising used car auction prices.

In terms of airfare prices, Goldman Sachs expects a 1.0% increase (3.2% growth in October). Although Goldman Sachs equity analysts observed an increase in online indicators for airfare prices last month, the bank expects the residual seasonal impact this month to be smaller than in previous months.

Regarding auto insurance, Goldman Sachs expects prices to rebound in November, rising 0.5%, indicating that although the growth rate of auto insurance prices is slowing, it is still in a trend of continuous premium increases. Goldman Sachs' online data set shows that higher car prices, repair costs, and medical and litigation costs are all putting pressure on insurance companies, forcing them to raise prices.

However, since insurance companies need to negotiate price increases with regulatory agencies in various U.S. states, the transmission of premiums to consumers has a significant lag. The gap between most premiums and costs has now been bridged. Therefore, Goldman Sachs expects the growth rate of CPI auto insurance prices to return to pre-pandemic levels next year. Due to the small weight of auto insurance in the PCE index and the use of different data sources, Goldman Sachs believes these changes will not have a significant impact on PCE inflation.

In other sub-item data, based on the complex discount data during the holiday season and the replenishment of relatively weak October data, Goldman Sachs expects clothing prices to rise 0.5% and household goods to rise 0.1%.

Goldman Sachs expects the CPI growth rate in the housing category to slow down, with owners' equivalent rent rising 0.33% (up 0.40% in October) and rent rising 0.28% (consistent with October). Goldman Sachs expects the communications sub-item to decline by 0.5% due to seasonal factors.

Looking ahead, Goldman Sachs expects inflation to further slow down over the next year, with monthly CPI inflation rates between 0.20% and 0.25% in the coming months, but January may be slightly higher, reflecting a small push from price increases at the beginning of the new year.

The research report believes that the rebalancing of the automotive, housing rental, and labor markets will bring further inflation slowdown, but "catch-up inflation" in the healthcare sector and the escalation of tariff policies may bring some offsetting effects. Goldman Sachs expects the core CPI to grow by 2.7% year-on-year in December 2025, and the core PCE to grow by 2.4% year-on-year Previously, the Federal Reserve also released the latest survey, showing that the short-term, medium-term, and long-term inflation expectations of respondents in the U.S. for November have all risen. The one-year inflation expectation for November increased to 3%, up from 2.9% in October; the three-year inflation expectation rose to 2.6%, up from 2.5% in October; and the five-year inflation expectation is 2.9%, up from 2.8% in October