Recent Updates
- US: Consumer Sentiment (Feb-final), Chicago PMI (Feb),Personal Income, Adv Trade & Inventories (Jan)
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- Canada: Industrial Product Prices (Jan)
- UK: Motor Vehicle Production (Jan)
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Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone May 13, 2005
A recurrent theme of our reports over the last couple of months has been the continuation of low consumer price inflation despite high energy prices. This phenomenon has persisted through April in several European countries that reported their latest CPI data today.
This is especially evident in France, where the total CPI has even slowed somewhat in the face of the recent surge in energy costs. The first four months of 2005 averaged year-on-year inflation of 1.8%, compared with a five-year average of 2.0%. Food is cheaper, clothing prices are little changed and manufactured goods have declined outright. Services prices have been rising 2.7%, but this is less than their 3%+ pace in 2002.
In Finland and Sweden, which we mentioned here a month ago, the 12-month change in total CPI ticked up by 0.1% and 0.2%, respectively from their March rates. But that still leaves Finland at 1.1% and Sweden at a mere 0.3%. In Spain, total inflation was 3.5% year-on-year in April, with some signs of upward creep. But the pace excluding energy has been steady at 2.9% for the last two years.
Perhaps we are simply short-sighted in these comments; perhaps it simply takes longer than a year for the "second-round" effects of sustained energy prices to filter through to other items. Or perhaps, as we noted elsewhere recently, the second-round effects will appear more as restraints to demand growth than spurs to higher inflation.
Yr/Yr % Changes Not Seasonally Adjusted |
Apr 2005 | Mar 2005 | Feb 2005 | December/December|||
---|---|---|---|---|---|---|
2004 | 2003 | 2002 | ||||
France | 1.8 | 1.9 | 1.6 | 2.1 | 1.2 | 2.3 |
Finland | 1.1 | 1.0 | 0.2 | 0.4 | 0.6 | 1.7 |
Sweden | 0.3 | 0.1 | 0.7 | 0.3 | 1.3 | 2.1 |
Spain | 3.5 | 3.4 | 3.3 | 3.2 | 2.6 | 4.5 |
US | -- | 3.1 | 3.0 | 3.3 | 1.9 | 2.4 |