Aug 2025 CPI Estimate

Thursday at 8:30 am ET, we will get the Aug CPI. A Fed cut next week is pretty much baked in, but the market is focusing on what the Fed will do next, and Thursday’s CPI will be crucial for what the Fed signals they will do after Sep.

My average error for estimating headline CPI (based on the last 30 CPI estimates from Feb 2023 - Jul 2025) is almost perfect at -1 bps (-0.01 pp).

More importantly, my headline CPI estimates have been closer to the actual number than the average Wall Street estimates by 2 bps on average, 18 times in the last 26 months, or 69% of the time.

My average error for estimating core CPI (based on the last 30 core CPI estimates from Feb 2023 - Jul 2025) is also almost perfect at -1 bps (-0.01 pp).

My core CPI estimates have been closer to the actual number than the average Wall Street estimates by 2 bps on average, 18 times in the last 26 months, or 69% of the time.

For public links to my prior month's CPI estimates, go to ArkominaResearch.com.

Here are my Jul CPI estimates published on Aug 11, a day before the official BLS numbers came out:

As mentioned, the Aug CPI will be crucial in determining what the Fed signals they will do after Sep. If CPI is tame, they could signal more cuts after this month's meeting, but if CPI is hotter, the Fed might signal fewer or even no cuts, depending on the data.

So, where will the CPI print on Thursday?

My Aug CPI estimates are…

• Headline CPI

  • +0.3% MoM (same as both consensus and the Cleveland Fed)

  • +2.8% YoY (-0.1 pp lower than consensus and -1 bp below the Cleveland Fed)

• Core CPI

  • +0.3% MoM (same as consensus and +2 bps above the Cleveland Fed)

  • +3.1% YoY (same as consensus and +2 bps above the Cleveland Fed)

My unrounded estimates:

If CPI comes in like I expect, the might signal more rate cuts after Sep. However, whether and how much they cut in Oct and/or Dec will ultimately depend on more months of inflation and labor market data.

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