Daily update
Daily update
- US August consumer price inflation is subject to durable goods deflation and profit-led disinflation, but energy prices will add to the headline inflation rate. The details matter. The fictional owners' equivalent rent price is still pushing up inflation. As no one pays this, middle-income homeowners enjoy a lower inflation reality. Regional variations (high inflation in Florida, deflation in Alaska) may be politically important ahead of 2024 elections.
- The annual report on US median incomes showed US households experienced falling real incomes last year. Credit and savings propped up consumption. Most major economies have had negative real wage growth (hardly a sign of strong worker pay bargaining power). Yesterday's data showed UK real median pay is still negative—the average pay seems distorted by a few high earners, and high earners getting pay increases is rarely a cost-push inflation risk.
- UK GDP fell in July. Weakness was anticipated with wet weather and strike action both factors (teachers' strikes lower services GDP as, unusually, the UK measures education value on the basis of how much teaching happens).
- Japanese producer price inflation was fractionally lower than expected, not really offering a signal. Eurozone July industrial production is expected to decline.
