Daily update
Daily update
- German, French, and Dutch December consumer price inflation was as expected, with a very subtle downside surprise. While energy base effects are raising headline inflation rates a little in Europe, the implication is that Eurozone flash consumer price data could surprise in a very unsurprising way by being marginally less than consensus.
- It is US employment report Friday—when an increasingly unreliable survey of people who are prepared to tell an telephone caller all about their private life is published. The consensus forecasts are unexciting—essentially static unemployment and average hourly earnings (employing lower-paid seasonal workers may give some downside to average earnings, because average earnings are not wages).
- The US inflation cycle has had relatively little to do with labor markets—real wage growth was negative for a long time. The growth implications should be consistent with a softer landing for the economy. Today’s report is (again) likely to confirm investors’ preconceived biases about Fed policy.
- French retailer Carrefour is refusing to stock PepsiCo products because of price increases. Consumer rebellion means retailers now struggle to raise profit margins, and seem to find cost increases harder to pass on. Signs in Carrefour inform customers that it is all PepsiCo’s fault, suggesting an element of spin to this narrative.
