Goldman Sachs: US Inflation Looks Less Problematic Beneath the Surface

Headline measures make the US look like a global inflation outlier, especially on PCE, but the underlying composition suggests the opposite. Core goods inflation has normalised in most developed and emerging markets, while US goods inflation remains temporarily elevated by tariffs and AI-related measurement distortions. Once medical and financial services are treated consistently, US non-shelter services inflation also looks more benign than in other developed markets, while US unit labour cost growth appears better contained. Shelter inflation has largely normalised in the US and across emerging markets but remains elevated in several other developed economies. Overall, the global inflation overshoot is being driven mainly by sticky services inflation, whereas a larger share of the US overshoot comes from goods inflation that is more likely to reverse. That suggests the US may actually have less of a persistent inflation problem than other countries, despite higher top-line readings.