"U.S. Core Goods Inflation Stays Below Global Heat"

The U.S. economy faces growing concerns over a potential slowdown in growth, as highlighted by J.P. Morgan in recent economic forecasts. While overall inflation in the United States has eased, the bank warns that the pace of economic expansion is likely to decelerate in the near term, driven by shifting price dynamics and global economic trends [1]. The firm’s assessment comes amid broader observations that core goods inflation—excluding food and energy—has risen modestly, though services inflation has declined, balancing the overall inflationary picture [1].

According to recent data from the White House, headline consumer price index (CPI) growth has averaged 1.9 percent annually from January through July 2025, indicating a moderate rate of inflation. However, this figure masks underlying changes in relative prices across sectors. Core goods inflation, while on the rise, remains at a low level compared to other countries. The U.S. core goods inflation rate stood at 1.2 percent over the 12 months ending in July 2025, and 1.1 percent annualized since January 2025—figures that place the United States at a relatively favorable position globally [1].

Comparative international data reveals that core goods inflation has increased globally over the same 12-month period. Despite the U.S. modest increase, core goods prices in other countries have risen at a faster pace, leading some analysts to suggest that the U.S. economy may be insulated from the full brunt of global inflationary pressures. This divergence has sparked debate among economists about the long-term sustainability of the U.S. economic model and the role of trade policy in shaping inflationary trends [1].

J.P. Morgan analysts have pointed to this evolving inflation landscape as a sign of a broader economic slowdown. The bank’s economic research team noted that while consumer demand has remained resilient, key sectors such as manufacturing and trade are showing signs of deceleration. These trends are expected to influence overall GDP growth in the second half of the year, particularly if global inflationary pressures continue to rise and impact U.S. trade flows [1].

The U.S. Federal Reserve is likely to remain cautious in its monetary policy decisions, given the mixed inflation signals and signs of weakening economic momentum. With core goods inflation still below expectations based on international trends, the Fed may delay further rate hikes while monitoring services inflation, which has been on a downward trajectory. This balancing act between inflation control and growth preservation is expected to dominate policy discussions in the coming months [1].

As the U.S. economy navigates a period of transition, market participants are advised to closely monitor key inflation indicators and global economic developments. While the current inflationary environment appears manageable, the broader risks of a slowdown remain a concern for both policymakers and investors. J.P. Morgan’s projections reinforce the need for strategic economic planning to mitigate the potential impact of a slower growth trajectory [1].

Source:

[1] U.S. Goods Inflation Lower than Other Countries (https://www.whitehouse.gov/articles/2025/09/u-s-goods-inflation-lower-than-other-countries/)