Daily update
Daily update
- US headline consumer price inflation rose, but the details hint at weakening pricing power and support for a soft economic landing. Most market-determined prices are softening. Durable goods deflation continues. The fairy tale of owners’ equivalent rent, where statisticians pretend people pay themselves an ever-rising monthly rent to live in the houses they own, was the main driver of higher prices.
- Because owners’ equivalent rent is a fantasy, spending firepower for middle income homeowners is improving in reality. The next pay increase is not going to be spent on renting a house you already own, which means it can be spent on other things. We will get the US Michigan consumer sentiment data later today, including the ever-hilarious split between the economic views of Republicans and Democrats.
- China’s consumer and producer price inflation rates were both lower than expected in September. Lower consumer prices owe much to falling food prices (pork prices are experiencing aggressive deflation). This does not transmit to the rest of the world. Exports and imports both fell, though the official data signalled the drop in exports was a little less than feared.
- Final French and Spanish consumer price data is due, as are US import and export prices. Bank of England Governor Bailey speaks.
