Comerica Bank SVP and chief economist Bill Adams expects U.S. May CPI YoY to top
4%, the highest in three years, driven by last month’s gasoline increase. Core
CPI YoY is expected to stay relatively moderate, near 3%. Headline inflation in
May is forecast to exceed average hourly earnings growth, further eroding
consumers’ real purchasing power. PPI is also expected to post another sizeable
rise, outpacing CPI, reflecting strong weights for petroleum products, metals
and transportation costs in producer prices. The University of Michigan
preliminary June consumer sentiment index is expected to rebound from May’s low,
aided by a two-week decline in gasoline prices and recent equity gains.
