Daily update
Daily update
- Headline US May consumer price inflation is expected to be close to 4% y/y. It is worth remembering that this is not news to parts of the US—areas like New York and Los Angeles have seen the headline inflation rates collapse this year, and are already experiencing sub-4% inflation. This rapid disinflation argues against the inevitability of price stickiness.
- The core consumer price measure is likely to be supported by the fictitious owners’ equivalent rent, and volatile used car prices. Any US household that owns its own home but is not buying a used car has a cost of living experience below that of consumer price inflation. It thus has more spending power. This covers almost two thirds of US households.
- UK labor market data is expected to show an ongoing fall in real earnings growth. There are final consumer price inflation figures from Germany and Spain. But the European data that is likely to get most attention is the German ZEW business sentiment survey—not because it is more accurate, but because it has novelty value.
- The People’s Bank of China eased a short-term policy interest rate. This signals more easing is likely in other rates, and might hint at moderate concern about the pace of domestic demand growth.
