Daily update
Daily update
- US February consumer price data are due. It is the detail that will tell us about the strength of disinflation forces. The January number had less headline disinflation than anticipated, but this owed much to the fairy tale of owners’ equivalent rent—a price no one pays. The inflation experience of homeowners is a lot less than headline consumer prices, which means their spending power is better.
- Start of year price increases should fade, and in the lottery of used car prices disinflation is also likely. Regional inflation figures should continue to show most parts of the US (except Florida and Texas) are in a low inflation environment. This is all consistent with the Federal Reserve following inflation lower with a second quarter rate cut.
- UK labor market data still carries an official health warning of unreliability. There was a small rise in reported unemployment. Average earnings growth can be affected by workforce composition—every time a self-service checkout is used, average earnings growth is supported (as the number of below-average paid jobs declines).
- Other data is rather dull. The German final consumer price data is one of the few German statistics that is rarely revised. The US NFIB business sentiment survey generally correlates quite strongly with Republican economic sentiment.
