- Sweden: Consumer Confidence, Business Tendency Survey, Public Finance (Mar)
- Spain: Mortgage Market (Jan), Order Book Forecast (Mar)
- Italy: ISTAT Business & Consumer Survey Press Release (Mar)
- Germany: Business Registrations & Deregistrations (Dec), Import & Export Prices (Feb), IAB Labor Market Barometer (Mar)
- Vietnam: GDP (Q1), CPI, IP, International Trade, Passenger & Cargo Traffic Statistics, Manufacturing Sales and Inventories, International Visitor Arrivals (Mar); Korea: Economic Sentiment
- more updates...
Economy in Brief
U.S. Energy Product Prices Remain Under Pressure
Regular gasoline prices held steady at $2.32 per gallon last week (12.1% y/y) for the third straight week...
German Federal Debt Levels Fall
German debt level fell outright in Q4 2016 as the ratio of federal debt-to-GDP also fell...
NABE 2018 Forecast: Modest Improvement in Economic Growth & Higher Inflation
The NABE expects 2.5% real U.S. economic growth in 2018 compared to 2.3% forecast for 2017...
Texas Factory Sector Activity Remains Strong
The Dallas Fed indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index eased during March...
EMU Money and Credit Growth Are Less Than Impressive Than Euro-PMIs
EMU nominal money supply growth is slightly higher over three months, but credit growth in the EMU is slower...
Durable Goods Orders Strengthened by Another Jump in Aircraft
New orders for durable goods rose 1.7% (5.0% y/y) during February...
by Robert Brusca September 2, 2016
The euro area PPI rose in July, ticking up by 0.1% as it fell by 2.9% year-over-year. Capital goods prices rose by 0.1% in July as consumer goods and intermediate goods prices each rose by 0.2%. Year-on-year capital goods prices are higher, rising by 0.5% while consumer goods prices are lower by a skinny 0.1% and intermediate goods prices still are lower by 2.2%. All sectors show inflation, having begun to accelerate from 12-month to six-month and from six-month to three-month.
Country-level data, however, show more price weakness in July as 9 of the 11 countries in the table show June-to-July price drops. Germany and the U.K. are exceptions with prices increasing month-to-month. For the U.K., the PPI sped ahead by 0.3% on the month.
Still, if we look at sequential growth rates at the country level from 12-month to six-month and from six-month to three-month, we find that prices are accelerating on all those horizons for each county in the table. Inflation at the PPI level is accelerating on a broad front in the EMU and in the two EU members in the table. Dutch inflation is actually galloping ahead at a 13.2% annual rate over three-months.
The chart shows a clear bottoming tendency for prices in the main EU sectors. The downturn in prices has slowed and country by country there is a shift underway.
Whether this is the final turning point or not will depend a lot on oil. Oil prices continued to be fickle and their ability to `stick' at a higher level will also depend on growth. The global manufacturing PMIs released yesterday were not encouraging on that score, especially not the U.S. ISM manufacturing PMI which dipped below 50 yet again.
At the IMF, Christine Lagarde is talking about cutting forecasts again and she is urging countries to take forceful steps to escape the pull of weakness. Economic weakness can be like a black hole with its own gravitational force pulling an economy back into the abyss. Sometimes something is needed to more clearly signal that ways of weakness a being put behind and that growth lies ahead. Unfortunately, in this cycle there is little left to be done to create such a clear signal or illusion. There really is nothing left up my sleeve. Monetary moves have been made so often that what monetary policy has left to offer may chill the spine more than warm the heart. Such are negative interest rates. The game is still on.