BlackRock Investment Institute

Macro insights

U.S. inflation set to stay higher

The August U.S. Consumer Price Index (CPI) showed a surprising cooling of core price pressures. Some of the categories seeing a spike during the restart, such as used car prices, are starting to cool.

The data also confirmed that it’s still difficult to anticipate month-to-month swings given the unique nature of the restart. Ultimately we expect some of the supply-demand mismatches driving the volatility in prices should subside. We saw some evidence of that in this report, such as with airfares
and other travel prices. 

Inflation pressures

Chart showing small businesses still raising prices

Sources: BlackRock Investment Institute, National Federation of Independent Business (NFIB), U.S.
Bureau of Labor Statistics,, with data from Refinitiv Datastream and Haver Analytics, September 2021.
Notes: the orange line shows the net number of firms in the NFIB survey of small and medium-sized
businesses reporting that they are currently raising their prices. A value of 0 indicates that the same
number of firms are raising and reducing prices. The solid yellow line shows the annual change in the
U.S. core CPI inflation rate.

Our medium-term inflation view is not just about these restart dynamics. More persistent forces are at play. These include new objectives for major central banks to tolerate higher inflation, and the journey to net-zero carbon emissions. The service sector has held up reasonably well despite the delta variant surge, contributing to the persistent price pressure. We see these and other factors keep inflation higher in the medium term.

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Elga Bartsch
Head of Macro Research
Read bio
Nicholas Fawcett
Macro Research

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