Daily update
Daily update
- The UK’s May shop price index showed ongoing non-food deflation, and a slower pace of food price increases as the profit-led inflation episode wanes. Supermarkets’ dual pricing structure (offering preferential discounts to loyalty card holders) seems to be ending. Shop price data includes the discounts, consumer price data does not—and the gap between the two has disappeared.
- Japan’s April service sector producer price inflation rate increased. This may owe something to the weaker yen (service contracts agreed in foreign currency terms will cost more in yen terms)—these prices are some way removed from consumer spending. German wholesale prices have been in deflation for a year, and are likely to stay that way in April.
- The ECB’s consumer inflation expectations survey is not really useful information. Consumers lack the forecasting brilliance of economists, so are not predictive, and only really matter in policy terms if they lead to a change in consumer behavior. They do not appear to be doing that.
- The US is offering evidence of political partisanship rather than price pressures. The Conference Board consumer confidence poll does not distinguish between Republicans and Democrats, but political polarization is bound to affect the results. The Dallas Fed manufacturing sentiment poll publishes very subjective comments from supposedly objective respondents.