- US: Advance Durable Goods, Advance Trade & Inventories (Mar)
- Brazil: PPI (Mar); Mexico: Compensation and Productivity (Feb)
- Canada: Payroll Employment, Earnings, & Hours (Feb)
- Spain: Advanced HICP & CPI, Construction Business Survey Press (Apr)
- Belgium: CPI (Apr)
- Germany: GfK Consumer Climate Survey, State CPI: Bavaria, Saxony, Berlin, Hesse, North Rhine-Westphalia, Brandenburg (Apr)
- Building Permits (Feb)
- UK: Motor Vehicle Production (Mar)
- more updates...
Economy in Brief
U.S. Gasoline Prices Are Little-Changed; Crude Oil Falls
Regular gasoline prices of $2.45 per gallon last week (13.3% y/y)...
Japan's METI Indexes Show Ongoing Gains
The services sector is assessed by the METI indexes where it is named the 'tertiary sector.' That sector index rose to 104.1 in February...
U.S. New Home Sales & Prices Strengthen
Sales of new single-family homes increased 5.8% (15.6% y/y) during March to 621,000...
U.S. Consumer Confidence Backpedals
The Conference Board Consumer Confidence Index fell 3.7% during April (+27.0% y/y) to 120.3...
U.S. FHFA House Price Index Regains Strength
The FHFA U.S. house prices increased 0.8% during February (6.5% y/y)...
French Manufacturing and Service Sectors Weaken But Stay on Trend or Hold Recent Gains
The French manufacturing sector trend index is down to 1 in April from 3 in March...
by Robert Brusca July 26, 2016
There is no rest for the weary. Japan may be tired of weak prices, but the weakness is not letting up. In June the overall PPI was flat month-to-month, keeping the PPI lower over 12 months by 4.3% and falling at a -3.9% annualized rate over three months. The pace of overall PPI decline is not escalating, but it is not easing up by much either.
Trends in the quarter
In the quarter-to-date, the PPI is falling at a 3.3% annual rate (AR) led by a 4% AR decline in intermediate goods and aided by a 0.3% AR drop in capital goods. Consumer prices are dead flat in the quarter to date which is now a full quarter calculation.
PPI pressures are absent
The headline PPI is lower in two of the last three months. The PPI for consumer prices is lower in only one of the past three months but flat in another. Capital goods prices are lower in one month and flat in two. Prices trends in Japan obviously remain quite muted and are not just the result of one month's contribution but of ongoing commodity-class wide trends- real macroeconomic price weakness.
The PPI goods index does a reasonably good job of signaling on the direction for the overall CPI. Japan's PPI continues to make the case for price restraint.
The unexpected challenge of inflation
Japan, faced with a still strong yen, a shrinking population and weakness in its main trading partner, China, faces a series of ongoing challenges to getting its inflation rate in gear again. While Japan is now said to have rejected the notion of `helicopter money' (monetary expansion financed simply by printing money not by selling bonds), it is not clear what added steps it is prepared to take. Its move to negative rates this year caught markets by surprise and did not have the intended effect. With the BOJ meeting this week, all eyes are on the central bank to see if it has any rabbits to pull out of its hat. Presto inflation-o? Back in the 1970s, no one would have suspected that it could be so hard to get inflation going again. Things change...boy do they ever.