MNI US Inflation Insight: Solid But Could Have Been Firmer

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• PPI started this week’s inflation releases with a report that relieved concerns about tariff-related price pressures whilst highlighting the volatile and revision-prone nature of the trade services category.
• CPI then followed and was marginally stronger than expected on a M/M basis for both headline and core but with a more benign readthrough to core PCE – analyst estimates are tracking at ~0.20% M/M.
• Underlying core goods inflation is still running at a robust monthly clip, as it has been since April when it stepped markedly higher, although its peak for now appears to have been in June.
• With CPI inflation readings reasonable close to expectations, we believe the main driver of the dovish reaction was instead a spike in initial jobless claims with some paring of that move owing to a concentration in Texas.