- Gasoline prices are lowest since early this year.
- Crude oil price reverses two-week gain.
- Natural gas prices drop sharply.
USA| Oct 22 2024
U.S. Energy Prices Weaken in Latest Week
by:Tom Moeller
|in:Economy in Brief
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Japan| Oct 18 2024Does Japan’s CPI Pave the Way for Opportunistic Normalization?
Japan’s core CPI – the CPI excluding fresh food and energy- rose by 0.2% in September as the headline rate fell by 0.4% - both month-to-month. The measure of all items excluding food and energy rose by 0.1%; prices excluding only fresh food fell by 0.3%.
Year-on-year inflation trends Year-on-year inflation was excessive for the headline at 2.4%, but that was a down-draft from a year-on-year pace of 3.1% from a month-ago. Core inflation settled to target on a 12-month basis as the pace dropped to 2.0% from 2.1% a month ago. Prices less fresh food fell to a 2.4% pace over 12 months from a 2.8% pace a month ago. Prices excluding all food and energy logged a 12-month gain of 1.7%, the same as a month ago. Not surprisingly, different measures show different trends. The headline is a bit hot but the preferred core measure, excluding only fresh food and energy, shows inflation dead-on target. Still, that is not the end of the story.
Inflation risk rises in the core The X-fresh food and energy core (xFFE) is spot-on over 12 months, but that may be a passing fancy. Sequential growth rates for this measure show the xFFE core running at a 2.3% clip over six months and by 3.0% at an annual rate over three months. Inflation may only be transitorily at its 2% target as it builds a head of steam for stronger expansion that, if sustained, would push the core beyond 2%.
Global| Oct 17 2024Charts of the Week: Following the Leader
A soft landing narrative has continued to shape sentiment in financial markets over recent days, supported by several factors. These include upbeat corporate earnings news, a sharp drop in oil prices (see chart 1), and weaker-than-expected inflation data (chart 2). However, concerns about global growth persist, particularly given the underwhelming economic data that’s been emerging from China (chart 3). While the monetary policy initiatives announced in late September were met with enthusiasm from investors (chart 4), subsequent fiscal policy measures have clearly fallen short of expectations. Back to a more positive note, the latest euro area bank lending survey suggests that the ECB's recent easing efforts, including this week’s 25bps rate cut, are starting to reap some benefits (chart 5). Meanwhile, ongoing optimism around the role of AI technology has also contributed to a soft landing narrative, despite the absence of clear productivity gains thus far (chart 6).
by:Andrew Cates
|in:Economy in Brief
USA| Oct 17 2024U.S. Retail Sales Pick Up in September as Nonauto Sales Firm
- Core sales post strong increase.
- Miscellaneous store sales surge.
- Motor vehicle sales steady while gasoline purchases fall sharply.
by:Tom Moeller
|in:Economy in Brief
USA| Oct 17 2024U.S. Industrial Production Drops in September, w/ Boeing Strike and Hurricanes Affecting Output
- September IP -0.3% m/m (-0.6% y/y); August gain revised down.
- Mfg. IP declines 0.4% m/m, w/ durable goods down 1.0% and nondurable goods up 0.2%.
- Mining activity drops 0.6% m/m, but utilities output rebounds 0.7% vs. two straight m/m falls.
- Key categories in market groups mostly decrease.
- Capacity utilization down 0.3%-pts. to 77.5%.
USA| Oct 17 2024U.S. Home Builders Index Increases in October
- Overall index stands at highest level in four months.
- Component performance is mixed.
- Regional indexes largely improve.
by:Tom Moeller
|in:Economy in Brief
USA| Oct 17 2024Philly Fed Manufacturing Index Rises Further in October
- The headline index rose more than expected to 10.3 from 1.7.
- The increase was rather widespread with the ISM-adjusted index rising to 52.7.
- New orders and shipments components indexes rebound from negative readings in September to positive in October.
- The employment component index fell back into negative territory in October after a solid increase in September.
- Capital spending expectations rise markedly.
by:Sandy Batten
|in:Economy in Brief
USA| Oct 17 2024U.S. Business Inventories Rose While Sales Fell in August
- Inventories increased 0.3%, led by retailers.
- Sales declined, led by factory sales.
- Inventory/sales ratio stuck in a range.
by:Sandy Batten
|in:Economy in Brief
- Continuing claims up 9,000 in the October 5 week, after the 39,000 jump in September 28 week.
- Insured unemployment rate holds at 1.2%.
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