Our AI-Generated CPI Forecasts: Oct 2023

October US CPI numbers will be issued tomorrow.

OdinUltra is forecasting:

· Headline Inflation to be 3.2% YoY (+/- 0.12%) for October 2023 – a decrease fueled by energy and food items.

· Core inflation to be slightly higher at 4.15% YoY (+/- 0.11%) for October 2023. An increase driven by shelter, particularly from hotels, and we expect this trend to continue until the end of the year.

Leveraging our high-frequency data, we model individual components of CPI in addition to the overall headline and core index. Our machines predict the energy component to improve to -6.36% YoY, contributing to the fall in headline inflation. Our models forecast the food component to continue to improve to 3.31% YoY.

Our algorithms project the shelter component to rise to­ 7.11% YoY; while the year-over-year moderation in rents remains, average daily rates (ADRs) for hotels have grown. As we enter the holiday season, we estimate it has room to expand. Our machines forecast the medical care services component to deteriorate to -2.17% YoY.

Our models predict the transportation services component to better to 8.06% YoY, especially since international airline fares have dropped. Our algorithms predict transportation commodities to improve to -1.66% YoY. Used car prices continue to sink, and new car prices have also slipped amidst elevated inventories and more incentives for buyers.