Daily update
Daily update
- Markets exhibited a naïve belief in the accuracy of economic data yesterday. US first quarter GDP will probably be revised stronger, and hinted at future consumer strength. The data does put more focus on today’s personal spending figures—and in particular the personal consumer expenditure deflators.
- Yesterday’s GDP price measured showed non-durable goods price levels lower than they were at the end of last year. Durable goods price levels are lower than at any time in either 2023 or 2022. Inflation is purely a service sector issue. Financial services prices helped push up inflation. In part this is commissions, related to rising markets. US statisticians’ peculiar addiction to annualizing everything means the inflation headlines assume markets will continue rising at the same rate as in the first quarter. If they do not, this aspect of inflation will moderate.
- Japan’s April Tokyo consumer price inflation exhibited more dramatic disinflation than had been anticipated. This reflects subsidies for education costs, which will not be felt outside of Tokyo (although Tokyo is a large part of the Japanese economy).
- The Eurozone is publishing consumer inflation expectations, which will be guided not by the future but by current food and fuel inflation.
