Daily update
Daily update
- Disinflation data continues today. The US July personal consumer expenditure deflator is expected to show fairly stable inflation rates. It is worth remembering that if inflation falls because of owners’ equivalent rent, this does not change the spending power of any US household (as OER is a fiction).
- On the spending side, yesterday’s revisions to second-quarter GDP boosted the role of the consumer noticeably. Middle-income households continue to spend, even as lower-income households are constrained. Economic data is plutocratic not democratic, and in an election year that difference (and the differences between consumers’ perceptions and reality) is important to keep in mind.
- Japan is defying the disinflation trend, with a rise in August Tokyo consumer price inflation. This was mainly about food and fuel prices (using the conventional global core measure, inflation rose less than 0.1 percentage point). The July unemployment rate rose unexpectedly and is back at early 2022 levels.
- French flash August consumer price inflation should show a significant decline in the headline rate. We will not have the details, but there is a chance of the Olympics adding to some prices (e.g. hotels), which will not actually change the inflation experience of French consumers. Mega-events can create isolated inflation, experienced primarily by tourists.
