Goldman Sachs economists expect inflation figures for April to be roughly in line with consensus estimates.
Specifically, the Wall Street giant projects a 0.28% increase in the core consumer price index (CPI) for April, just below the consensus of 0.3%. This corresponds to a year-over-year rate of 3.61%, aligning with consensus projections of 3.6%.
Moreover, Goldman predicts the headline CPI to rise by 0.37%, just under the consensus of 0.4%, corresponding to a year-over-year rate of 3.42%, slightly above the consensus of 3.4%.
Their forecasts include a 0.19% rise in CPI core services excluding rent and owners’ equivalent rent, and a 0.22% increase in core PCE for the month.
Economists emphasized three key component-level trends anticipated in this month’s inflation report.
“First, we expect a 1.6% increase in car insurance prices as prices continue catching up to costs,” they wrote.
“Second, we expect the health insurance component to remain flat starting this month as the BLS incorporates new source data on insurance premiums,” economists added.
Lastly, Goldman forecasts a slowdown in rent inflation to 0.37%, attributing this to the narrowing gap between rents for new leases and renewals. However, they believe that owners' equivalent rent (OER) inflation will remain robust at 0.45%, pointing to stronger rent growth for new tenants and a more substantial disparity between new and existing rents, particularly among single-family detached units.
Looking ahead, economists expect that monthly core CPI inflation will stay within the 0.25-0.30% range over the next few months. They expect this rate to decrease to approximately 0.2% by the end of 2024.
“We see further disinflation in the pipeline in 2024 from rebalancing in the auto, housing rental, and labor markets, though we expect offsets from continued catch-up inflation in healthcare, car insurance, and housing,” the team noted.
“We forecast year-over-year core CPI inflation of 3.5% and core PCE inflation of 2.7% in December 2024.”