Investing.com -- Goldman Sachs forecasts a 0.23% increase in core Personal Consumption Expenditures prices for July, slightly above the 0.22% core Consumer Price Index reading and somewhat higher than current consensus expectations.

The investment bank attributes this projection largely to portfolio management services, which it expects to contribute 8 basis points through a 4% increase. This reflects equity price gains during the second quarter, despite a decline in June, the reference period for July PCE calculations.

Goldman Sachs notes that some asset managers providing source data for the Producer Price Index series used in PCE calculations report revenues on a quarterly basis. This means both prior-month and prior-quarter equity returns influence measurements in the first month of each quarter.

July marks the final month the Bureau of Economic Analysis will use PPI data to measure portfolio management prices. The agency will shift to basing initial estimates on average hourly earnings growth for sector workers, which shows weaker correlation with equity prices. The BEA will later revise these estimates using revenue data from the Quarterly Services Survey when available.

This methodology change will create volatility in July's portfolio management inflation figures. The initial reading will reflect PPI data, then be revised lower on September 30 when the new methodology takes effect, and subsequently revised upward in December once QSS data becomes available.

Goldman Sachs believes most Federal Open Market Committee voting members would view the expected July inflation numbers as acceptable. The bank forecasts core CPI and PCE inflation will print around 0.2% in August, with methodological changes reducing the year-over-year core PCE inflation rate by 0.2 percentage points next month. Goldman Sachs expects the Federal Reserve to remain on hold in September and through year-end.