Daily update
Daily update
- The UK BRC shop price index showed further disinflation in August. The moderating inflation was led by food inflation slowing, which may not entirely translate into official consumer prices. The risk with profit-led inflation is that companies lose customer loyalty. As attacks on profit-led inflation have increased, UK supermarkets have responded with two-tier pricing offering discounts to customers with loyalty cards. Those discounts appear in the BRC data, but not in the official consumer price data.
- Eurozone M3 money supply turned negative last year. This does not mean deflation is around the corner (you cannot consider money supply without considering money demand). However, weaker bank lending is behind the move. The ECB’s autopilot tightening of policy is doing what it is supposed to by slowing credit growth, but unfortunately slowing credit growth does not offset energy-led or profit-led inflation.
- US JOLTS labor market data will pretend to record job vacancies. The response rate for the survey underpinning this data is so low that only the weirdest of the weird can be presumed to respond. However, reported vacancies should decline. This is less because of an easing labor market, and more because job hopping is slowing.
- Germany and the US offer consumer sentiment polls. These will exaggerate reality, as always.
