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’Busy morning of US data
Just a roundup and some quick commentary from a busy Thursday morning in US economic indicators…
First, initial unemployment claims fell to 352,000 last week. This isn’t our favourite indicator given how changes in the take-up rate can exaggerate its swings, and it tends to fluctuate a lot from week to week.
The reversing core-headline CPI gap
We still remember the August US CPI release that brought whispers of stagflation as it reported inflation in July that was well above what the market anticipated. (You heard no such whispers from us, natch.)
But since then:
Citi: EM rate cutters sheathed
If you were expecting widespread easing of policy rates across the emerging world, think again.
Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing,
UK inflation above 5 per cent…
… in September.
From the ONS:
Consumer Price Indices
• CPI annual inflation stands at 5.2 per cent in September 2011
• RPI annual inflation stands at 5.6 per cent in September 2011
The headlines for the September 2011 consumer price indices are:
Dear Mr Chancellor [updated]
It’s letter writing time again at Threadneedle Street.
In truth there’s not much to see in Tuesday’s inflation report from the Office for National Statistics.
Yes, the CPI number is little bit higher than consensus (4.3 per cent) but the RPI number is bang in line with expectations.
[Competition] An Australian CPI basket
There’s a lot of talk about the “two-speed economy” in Australia these days, and occasionally one even hears “Dutch disease” mentioned.
Retailers are suffering. Those mining salaries might be impressive,
On Fed tightening, again
Ahead of tomorrow’s FOMC statement and press conference, your (US) inflation graphs du jour:
The graphs show the findings of MIT’s Billion Prices Project (BPP), plotted against the latest CPI numbers through the beginning of June.
A CPI reversal of sorts
For a change, activity in commodity prices has tempered consumer price inflation in the US, at least for a month:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis,
Mervyn, crucified [updated]
The biggest year-on-year rise since October 2008…
The second-biggest one-month increase on record…
A record high in core CPI…
A stupid seasonal quirk…
Yep, just your usual UK inflation release in 2011.
The 2001 shift
Kevin Gaynor at Nomura — long-standing side-kick to Bob ‘The Bear’ Janjuah — has had an epiphany.
The crisis didn’t begin in the subprime fuelled mid-naughties.
It began in 2001, when the world experienced a structural shift like none other.
The headline-core CPI gap is all about motor fuel
While we’re on the subject of fuel prices, here’s a chart posted Tuesday in a paper by the St Louis Fed:
It shows how closely headline CPI, which includes food and energy, has tracked core CPI after stripping away the headline number’s motor fuel component.
Two more views on inflation expectations
Analysts, it seems, are indefatigable on the subject of inflation expectations these days.
Not that we blame them — we’ve contributed to the cacophony of opinions. And since it’s inflation week here in the US,
Generation U and the greying of UK employment [updated]
The aggregate UK employment figures released on Wednesday were optimistically received although they should have been treated with caution.
The LFS unemployment rate fell to 7.8 per cent from 8 per cent in the three months to February with employment increasing by 143k.
The inflationary Easter bunny
Some of the MPC may be exhaling a premature sigh of relief at the widely rumoured inflation *non-fail news* out Tuesday morning.
Analysts have been quick to note that the first below consensus CPI result for 10 months (4 per cent year-on-year vs 4.4 per cent expected) was driven by a fall in food prices (to 4 per cent y-o-y from 5.7 per cent in February),
UK inflation *non fail* shock
Cue sighs of relief at the Bank of England on Tuesday morning following news UK CPI had fallen to 4 per cent YEAR-ON-YEAR in March from 4.4 per cent YEAR-ON-YEAR in February.
[Gavyn Davies] What Osborne did today
So what did the Chancellor actually do today to change macro-economic strategy in the UK Budget?
In one important sense, he seems to have done little or nothing. The path for the structural budget deficit has been left almost exactly the same as it was after the 2010 Budget.
The wrong kind of inflation, the ironic austerity [updated]
Update: The inflation number’s out — and higher than expected. February saw CPI at 4.4 per cent, RPI at 5.5 per cent, which rates are at highs not seen since 2008 or 1991 year on year, respectively. The ONS said that clothing,
The headline-core CPI gap
Well, the warning signs were all there in this week’s earlier releases.
Import prices in February climbed much faster than expected, as did producer prices, and the Federal Reserve adjusted the language in its latest FOMC statement to reflect the “upward pressure”
‘BoE rolls hand-grenade under ONS inflation,’ JPM says
Buried a bit deep in Wednesday’s inflation report from the Bank of England — a little from BoE governor Mervyn King to the UK’s Office for National Statistics (ONS).
The central bank is now claiming that CPI inflation may have been “biased down”
CPI climbs just a bit more
The US Consumer Price Index climbed 0.4 per cent in January, and the core number was up 0.2 per cent. Each was slightly above consensus, with two thirds of the increase in the headline number driven by food and energy prices.
Inflation Chartology
Yes, that’s a y-axis change in the just-released February report…
Dear Chancellor…
Time to get the quill out again, Governor.
From the Office for National Statistics on Tuesday morning:
So, that’s the fifth consecutive quarter that UK CPI inflation has remained above target and the 10th time Bank of England chief Mervyn King will have been forced to write to the Chancellor and explain why:
The impact of inflation is ‘greatly exaggerated,’ MS says
In the current environment of growing “inflation anxiety”, particularly in Asia, Morgan Stanley strategist Gerald Minack looks at the extent to which inflation affects equity values.
And in his view,
The food price vulnerability index
Behold, the Tilt countries where interest rates are most at risk in a food heavy inflation environment.
No prizes for guessing who comes out on top:
China!
The index has been created by Citigroup and its based on the idea that a country’s central banks are more likely to have to respond to a food price shock if:
Record-breaking, forecast-busting UK inflation
Hitting the tape now, some uncomfortable reading for the Bank of England’s Monetary Policy Committee.
Via Reuters:
RTRS-UK DEC CPI +1.0 PCT MM, BIGGEST EVER MM RISE; +3.7; PCT YY (CONSENSUS +3.3 PCT YY),
Charting CPI
US CPI data for December is out, with a 0.1 per cent rise in the core index contrasting with a healthier 0.5 per cent rise in the headline number.
According to the BLS, four-fifths of the increase in the headline number came from a rising gasoline index:
CPI yawn
The November CPI came in roughly as expected, with the headline number increasing 0.1 per cent, slightly less than in October as rises in energy prices slowed.
And after four straight months of remaining flat,
UK inflation – still rising
Another month, another dismal UK inflation report.
From the Office for National Statistics:
For the Bank of England, about the only crumb of comfort is that November’s inflation rise was primarily due to higher food prices.
Inflation, as (un)expected
The CPI numbers for October are out from the US Labor Department, with the monthly 0.2 per cent increase a bit lower than the expected 0.3 per cent.
But here’s the chart we usually focus on:
Over the last twelve months,