Daily update
Daily update
- Yesterday’s US consumer price inflation rate slowed slightly less than expected—in the world of hashtag economics that was “hot” and a cue for hysteria. In reality, the fictitious owners’ equivalent rent drove most of the inflation. Moreover, inflation is geographically concentrated. For homeowners in most of the US, inflation in reality (excluding OER) is around 2%—bad luck if you live in Texas or Florida, where it is approaching 5%.
- UK inflation was stable (consensus expected a rise). The weirdness of UK energy pricing pushed prices higher (it will push the numbers lower later this year). Food price inflation continues to slow—sponge cakes are a disinflationary force, apparently. Wages pressures have not materialized—the shift to flexible working and online retail may mean that wage fears are overstated more in the UK than elsewhere.
- Across price data, consumer durable goods prices continue to be in deflation or disinflation. US durable goods price levels are lower than September 2021. In the UK, durable goods price levels are the lowest since August 2022.
- Eurozone GDP is due and is not going to excite anyone. In the US, the most important conclusion from the New York special election for the House of Representatives is the unreliability of opinion polls.