Economy in Brief

Danish confidence slipped to -17 in April from -15.5 in March, continuing a slide that extends back to late-2023. The weakness accelerated in late-2024 especially with the conclusion of the U.S. elections.

On data back to late 1995, the consumer confidence indicator for Denmark ranks in its lower 3.7 percentile. Confidence has been higher than this most of the time over this period.

The financial situation over the past 12 months ranked at a weak 7.3 percentile standing, but for the next 12 months an even weaker 1.4 percentile reading is in place. The existence of U.S. tariffs and pushback for Europe to carry more of its own defense burden seem to be adversely impacting Danish sentiment. There may also be some anxiety stemming from President Trump’s stated desire to have Greenland, a semi-autonomous Danish territory, become part of the United States.

The general economy has a confidence ranking at its 13.8 percentile over the last 12 months, but that drops to an all-time low ranking of zero for the next 12 months. All these respondents backed down in April compared to their March readings. The ‘expected’ financial conditions response fell by the most.

In sharp contrast, consumer prices for the last 12 months carried a 92.7 percentile standing; for the next 12 months, that pushes back up to the 98.6 percentile. Meanwhile, unemployment concerns, while ticking lower, have a standing at their 84.6 percentile higher since 1995 less than 16% of the time.

The environmental readings show the favorability of the time to purchase or save for the next or last 12 months (four metrics) all generate readings below their respective median (below a standing of 50%. The time to purchase readings are the weakest in this group.

However, the general financial situation for households currently holds above its historic standing at a reading with a 54.5 percentile standing. But that reading eroded last month.

Germany’s PPI in March fell by 0.7%; this is for the headline series excluding construction. The quasi-core PPI, excluding energy, rose by 0.2% in March. The headline series shows a number of months with the inflation rate negative, that is, with the price level falling, while the PPI excluding energy its flat in January with a 0.2% increase in February and in March. The stellar performance of the headline owes to weakness in oil prices.

Progressive inflation calculations on the PPI headline shows a decline of 0.2% over 12 months, a decline at a 0.9% annual rate over six months and a decline at a 4.9% annual rate over three months. These are progressively improving inflation dynamics; in fact, inflation that might be alarmingly weak under other circumstances. However, the PPI excluding energy is up by 1.5% over 12 months, up at a 1.2% annual rate over six months and up at a 1.4% annual rate over three months. These are clearly moderate increases in inflation and the quasi-core rate for the PPI has clearly stabilized.

In the first quarter, the German PPI inflation rate is falling at a 2.1% annual rate as the PPI excluding energy is rising at a 1.1% annual rate.

PPI components are not seasonally adjusted and are a little bit less interesting because of that. But the patterns for consumer goods, investment goods, and intermediate goods in the PPI show that all of them have stronger three-month annualized growth rates than 12-month growth rates, the opposite signal that we get from the headline which is seasonally adjusted.

Of course, monetary policy focuses much more on CPI prices than PPI prices; on that basis, the German CPI is up 2.2% year-over-year compared to a CPI ex-energy that's up at a 2.7% annual rate. Inflation presented on a CPI basis is much hotter than it is on a PPI basis and that's not surprising because the PPI is focused on the goods sector and production in Germany while the services sector has a much higher inflation rate and an inflation rate that tends to be more stubborn to change.

The table also chronicles the impact of Brent oil where prices fell by 3.5% in March after falling 3.8% in February. Over three months Brent is falling at a 4.6% annual rate which is a stronger decline than a 1.3% annual rate drop over six months, but year-over-year the Brent price is still down by 14.6%, and that larger, longer-lasting decline is probably still working its way through the pipeline into German prices.