Introducing

Robert Brusca

Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

Publications by Robert Brusca

Norway| Sep 02 2026
Norway’s Industrial Production Grows Strongly, but Not in Manufacturing
Norwegian industrial production surged in June, rising 7.6% month-to-month after falling by 0.9% month-to-month in May. The gain was lifted by utilities output and by a screamingly strong increase in mining & quarrying output. Output in manufacturing fell by 1%, in sharp contrast.

A bifurcated economy: Sequentially overall output is rising by 8.2% year-over-year and at a 32% annual rate over the last three months. Both utilities & mining are showing output up at a fantastically strong pace over the most recent three months, driving overall industrial production up at an extremely strong pace. However, for the same three-month period, manufacturing output has been weak, falling at a 3.7% annual rate while rising only 0.7% over 12 months.

Moderate to weak manufacturing: In June, manufacturing output fell by 1%, with consumer goods output falling by 1.5%, intermediate goods output rising by 3.6%, and capital goods output falling by 1.5%. Sequentially, the main manufacturing sectors are all showing tempered rates of increases. The lone exception is intermediate goods where there is an acceleration underway, with output rising 1.3% over 12 months, at a 4% annual rate over six months, and at a 6.5% annual rate over three months. Capital goods output is weak, falling at an 8.6% annual rate over three months. Consumer goods output is falling at a 0.4% annual rate over three months, led by a sharp decline in consumer durables, which are falling at a 29% annual rate over three months. The Norwegian economy is undergoing substantial crosscurrents in manufacturing. Manufacturing is feeling some amount of duress while a boom is going on in utilities and mining & quarrying.

Over this period, inflation in Norway has been extremely well tempered, with the HICP for June falling by 0.4% and the core HICP falling by 0.2%. Headline inflation is decelerating from a 2.6% pace over 12 months to 2.2% over six months, and it is falling at a 0.8% annual rate over three months. Core inflation is even well-behaved, rising 2.8% at an annual rate over 12 months and six months, and then rising at only a 1.6% annual rate over three months. Despite the strong growth in Norwegian output, there's no sign of overheating since the manufacturing sector is weak and the strength is lodged in mining & quarrying and utilities. The inflation environment remains tempered. Norwegian manufacturing output shows that all sectors have recovered beyond their 2020 pre-COVID levels except consumer durables. Durables output is still 12% below the output levels that had prevailed in January 2020; the rest of the sectors are showing, for the most part, reasonable increases in output over that period of time, ranging from moderate to quite strong—strong in the case of utilities and mining. Capital goods output is also up 21% from its January 2020 level. The Norwegian economy is experiencing some mixed patterns.

In the quarter to date, which is now the complete second quarter, overall output grew by 6.4% at an annual rate, with manufacturing growing at a modest 2.6% annual rate. Consumer goods output grew at a 2.6% annual rate, intermediate goods output grew at a 5.4% annual rate, and capital goods output grew at a skinny 0.1% annual rate. In the quarter, inflation rose at a 0.9% pace, with the core HICP up at a 2.8% annual rate. Obviously, as this quarter was ending, conditions have progressed differently as we're now looking at extreme strength in overall industrial production, declines in manufacturing, and moderation of inflation. These trends will have to be watched closely as things are changing in Norway.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 01 2026
EMU Inflation Is Too High but Not Jet-setting
There's a good deal of concern about the development of inflation globally and across individual areas where central banks are making decisions on what to do with policy. In the euro area in August, the headline rate rose by 0.4%, with the core rising by just 0.2%. The three-month inflation rate for headline HICP inflation is 3.3% annualized while the pace for the core is only 2.4% annualized. That's excessive relative to the 2% target but not a particularly strong acceleration for inflation. It's not the kind of number that says to the ECB that it has to raise rates right now.

Sequentially, the headline rate goes from 3.3% to 4.3% to 3.3% over 12 months, six months, and three months on an annualized basis. These are all too high and too uncomfortable, topping 3% and in one case topping 4%. These are the kinds of numbers that require some kind of remedy. However, core inflation posts a very different set of numbers that go from 2.4% to 2.5% to 2.4% over 12 months, six months, and three months, again all annualized. These numbers show inflation skimming too high over the target but not even half a percentage point too high. It’s the kind of thing that a central bank might be willing to continue to tolerate for a while. There's nothing about a 2% target that says 2.4% is an outrageous miss and requires a monetary policy remedy. On the other hand, the fact that that's happening and the headline rate is cruising at a much higher pace over the top of the target may be something that will cause the central bank to say, well, core inflation is too high and I'm also concerned that headline inflation is going to pull it even higher, so maybe it is time to act. These sorts of considerations will keep the market a little bit off balance and wondering what the ECB is going to do.

The Big Four economies in the monetary union all have year-over-year inflation rates for the headline that are excessive compared to the target set for the entire community. France has the lowest 12-month headline pace at 2.7%. Spain has the highest at 4.5%. Over three months, both France and Italy run headline inflation near a pace of 1.5%, while German inflation runs hot at 3.7% and Spanish inflation sizzles at a 7.0% pace.

Once again, however, core is a better-behaved series, at a 12-month pace of 2.9% for Spain, 1.4% for Italy, and with German ex-energy inflation up at a 12-month pace of 2.2%. Over three months, the ex-energy or core paces run at 0.4% for Italy, 2.0% for Germany, and 2.6% for Spain.

Bottom line European inflation is too high. The inflation rate in the community appears to be irregular, just judging by the Big Four countries and all their variation. Core inflation is mostly contained, but the headline is not. Still, core inflation is running mildly hot. It is decision time for the ECB. The safe course would seem to hike rates again to be sure. But nothing here is clear. Stay tuned.
by:Robert Brusca
|in:Economy in Brief
Europe| Aug 31 2026
EMU GDP in Member Countries: Some Minor Revisions
Growth among the eleven reporting EMU countries continues to be mixed. Growth in EMU is stable enough but modest at 0.5% to 1.2% over four quarters when assessed over the last four quarters. Quarterly results are more volatile, of course. Median annual growth is 1.3% to 2.1%.

Mixed Result on Growth In Q2, five of these eleven countries showed lower growth based on annualized quarter changes, while three showed weaker growth quarter-to-quarter based on four-quarter rates of growth. Belgium, Denmark, and France were weaker based on four-quarter growth rates. Growth in Spain was unchanged at 2.7%. Danish growth slowed to 4.6% from 6.1%.

Assessing Rates of Growth The change in growth rate assessment is useful but never quite definitive, as you can see from the still-strong, although slower, Danish pace of growth. 4.6% is less than 6.1%, but it is still quite strong, hardly a problem. Similarly, Ireland shows better growth, but that is an ‘improvement’ to -5.6% from -13.2%, an improvement and a sharp one, but still chillingly weak. Of course, Ireland, with a preponderance of multinational corporations headquartered there, shows some accounting fluctuations that are not that representative of a real macroeconomic impact on the Irish economy but can have a big impact on reported GDP. Ireland logs the only negative growth rate in the monetary union over four quarters, with Belgium the next weakest at 0.5%, and Germany and Italy at 1%.

The Big Four Economies The four largest EMU countries with GDP pooled have run an annual growth that has been quite steady around the 1% mark (0.9% to 1.1%). The rest of the EMU has had a more volatile growth rate. Pooling the remaining countries’ GDP performance yields growth rates over fourth quarters ranging from -0.9% to +2.1% over the last four quarters.

Within EMU The table chronicles growth rates for 11 EMU members plus the United Kingdom, the United States, and Japan. Among these 14 countries, year-over-year growth rates on data back to 1998 show only five countries with GDP growth rates ranking over four quarters above 50%; rankings above 50% put them above their median for that period. Those five countries are Spain, Finland, Italy, Portugal, and Denmark. While Spain and Italy have rankings above their medians for the period, German growth ranks at only 45.7%, and French growth is quite weak at a 17.4 percentile standing, marking a split in performance among the Big Four economies.
by:Robert Brusca
|in:Economy in Brief
Sweden| Aug 24 2026
Sweden’s Housing Market Shows Signs of Life
Sweden ended its rate cutting back in the third quarter of 2025. Since then, housing prices have drifted higher. However, housing activity, starts, have had a minor bounce from their lows but no real recovery. Starts are still well below their 2015-2022 levels. But the pace of decline has slowed and given way to oscillation and stability.

Sweden’s inflation rate has fallen back down to its pre-Covid pace. Inflation is no longer a problem there as the headline and core rates for two consecutive quarters are below the 2% mark and look comfortable there. House prices have stabilized. There has not been a year-on-year drop in house prices since 2024-Q1.

Housing completions in this environment have a one-quarter bounce. It’s too early to call this a bottom in completions, but we do have what looks like a spike low in completions. With housing prices creeping back up, having risen for three quarters in a row, the market is beginning to look firmer.

The economy is back in gear, with industrial production rising as of the end of 2024 and logging growth rates of over 4% year-over-year, even after slowing from its rapid recovery from mid-2024 to 2025-Q3.

Sweden shows the signs of having a soft landing in the wake of all the Covid excesses, even with the post-Covid War in Ukraine and the more recent bottlenecks for energy and other supplies in the Strait of Hormuz. Only time will tell if the authorities can continue this run of good policy results.

Monetary policy seems well positioned, with the policy interest rate less than a percentage point above the inflation rate but more than one and one-half percentage points above the core rate of inflation. Interest rates in Sweden were last dropped in late 2025.

Sweden is less affected by the complications in the Middle East and principally uses fossil fuels in its economy to fuel transportation. Apart from that, it has a rich resource of hydro, nuclear, and green energy. This helps give it a buffer against the rollicking prices in the global energy sector and to buffer it from some of that uncertainty.
by:Robert Brusca
|in:Economy in Brief
Global| Aug 21 2026
Flash S&P PMIs Show Ongoing Improvement Amid Unsettled Geopolitics
The S&P PMIs show a mixture of strength and weakness in August. However, the readings on average show the composite stronger in August than in July, the manufacturing readings stronger in August than in July, and the services readings slightly stronger in August than in July. That suggests there's broad sectoral improvement underway. However, there's still a great deal of irregularity. The composite indexes rose in five of the eight early reporting countries, with Australia, France, and Germany showing monthly weakening. Despite the weakening in France and Germany, the European Monetary Union showed better conditions on balance. Manufacturing sectors improved in August except for the United States, India, and the United Kingdom. France and Germany also had the only weakening service sectors in August.

Apart from August, the three-month, six-month, and 12-month averages, compiled only on completed data through July, show a bit more weakening. Five countries show composite readings weakening over three months compared to six months, with only the U.S., India, and Australia getting stronger. Over six months, all of the reporters’ composite values are weaker compared with their 12-month values on average, with only Japan getting stronger. For 12 months compared to 12 months ago, all the reporters are stronger and they're stronger on almost all of their readings except for the U.S. The U.S. composite is weaker over 12 months on average, compared to 12 months ago, and its service sector is weaker. The EMU composite is stronger, but the service sector is weaker compared to 12 months ago.

However, in terms of standings, the queue percentile standings for the group are quite good and have been clearly progressing over recent months. The average composite queue standing is in its 60th percentile. For manufacturing, it's in its 63rd percentile, while for services, the average is only in its nearly 49th percentile, just barely below its historic median. Manufacturing PMIs are on a long climb higher. The composite queue readings are dragged down by services, particularly in India but also in Germany and France. The U.K. and Japan have readings above 50 but by the thinnest of margins. The U.S. has a strong service sector by ranking, in its 80th percentile compared to where it's been since 2021. The next strongest ranking is a 69th percentile standing in Australia, and after that, it's a 57th percentile standing in the EMU. The services reading has been in a trendless oscillation since at least mid-2022.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Aug 20 2026
U.K. Industry Shows Sharp Improvement in CBI Survey
The U.K. CBI (Confederation of British Industry) survey saw orders advance to a diffusion reading of -25 in August from -45 in July. Despite this huge shift, the percentile standing of the August measure is only in its 27th percentile. This ranking emerges after the third largest month-to-month change in the orders reading since late 1993.

In contrast, export orders made their largest monthly change in their month-to-month reading in August, and that boosted the diffusion reading to zero in August from -33 in July. This has impact of boosting the rank or queue standing to its 86.9 percentile, a strong historic standing. We are seeing strong increases in orders in August. These improvements are not always boosting the readings into a zone of strength or even normalcy, but they have taken the readings out of the extreme weak tails of their respective distributions.

Looking ahead... The output volume diffusion reading, looking ahead to the next three months, improved to -7 in August from -30 in July. The month-to-month change in the reading is the seventh largest back-to-back improvement in that series. The expected output reading, however, is still only in its 16th percentile despite the extremely large monthly change.

On the other hand, the price expectations jumped to 22 in August from 11 in July, logging the 19th largest month-to-month increase, again on data back to late 1993. Average prices rank in their 84th percentile. So, their recent sizeable rise has pushed them up to the high distribution levels. Manufacturing output, which lags the CBI survey, is still much weaker and draws from a weaker period, judging from the CBI readings.

Growth seems to have picked up, but unfortunately so has inflation. The U.K. CPI-H measure rose by 0.6% m/m in July. It is now on an accelerating plane from 3.1% over 12 months to 3.4% annualized over six months to an annual pace of 3.7% over three months. Core inflation has been excessive and has popped over three months.

The U.K. situation remains a difficult one. Economic growth has not been very good. The party leader and labor party PM recently stepped down and has been replaced. Inflation has been excessive for a while. Despite deflating, inflation is moving back up again, and despite the unwind, it did not get back to 2% when it eased.

The pick-up in the CBI index is encouraging, but it is coming with increased price pressures. Relatively more of the improvement in orders is from exports, so the domestic economy is not looking like it will generate much in the way of sustainable inflation. A lot of inflation is still coming from energy, and no one really knows how to handicap that.
by:Robert Brusca
|in:Economy in Brief
Europe| Aug 19 2026
Inflation in the Euro Area Gets Worse
Inflation in the Euro Area Inflation in the euro area was up in July, rising 0.5% month-to-month after prices fell by 0.1% in June. Core inflation notched up, increasing 0.3% in the month after rising by just 0.1% in June. Core inflation is steadily ramping up. Headline inflation ramps up but eases off over three months compared to six months.

Month-to-month inflation in July accelerated in over 84% of the categories. June was an anomaly with inflation accelerating in only 15% of the categories after accelerating in 46% of the categories in May. Sequential diffusions find inflation higher over three months than over six months in 38.5% of the categories, and in 69% of the categories over six months compared to 12 months. Inflation rates over 12 months are higher than 12 months ago also in 69% of the categories.

At 2.9% over 12 months, ECB inflation is above its targeted pace of 2%. At 2.5%, core inflation is also overshooting but not as badly. The graphic shows that inflation is overshooting in each of the four largest monetary union members. Food inflation is below 2% (0.8%), annual clothing & footwear inflation is low (0.1%), furnishing & household equipment inflation is low (0.4%), and communications inflation (1.7%) and recreation & culture inflation (1.5%) are both still within the bounds sought by the ECB. That’s five of eleven categories below 2%, running at their own individual paces. Housing & utilities costs and transportation are both logging inflation numbers far above the 2% mark; both are affected by rising energy costs. Education and hotels & restaurants are showing strong pressure for an assortment of other reasons.
by:Robert Brusca
|in:Economy in Brief
Global| Aug 18 2026
ZEW Survey Shows Some Stability and Improvement
The Economic Situation: This month the ZEW series from German financial experts shows improving economic situations. Two of the four featured economies improve: the euro area improves to a reading of -21.5 in August from -37.7 in July, and the German economy advances to -61.1 from -77.6. The U.S. worsens to a reading of 12.9 in August from 14.9 in July, and the Chinese assessment is nearly unchanged at -25.1 in August compared to -25.2 in July. Apart from these diffusion readings and quite different from the diffusion readings is the Chinese ranking in a top position with a 73.8 percentile standing. The euro area has a 56.6 percentile standing. The U.S. has a 41.7 percentile standing. Germany has a 30.9 percentile standing. Only China and the euro area have standings above the 50th mark, which place them above their historic medians for their respective periods.

Macroeconomic expectations: Macroeconomic expectations are provided for the country-level readings for Germany, the U.S., and China. All three countries make an improvement in August, with the largest improvement coming from Germany and the smallest improvement coming in China. The standings show that, in terms of macroeconomic expectations, Germany’s economy has a 58.8 percentile standing, the U.S. has a 48.2 percentile standing, close to its median but below it, and China has a 41.5 percentile standing.

Inflation expectations: The inflation expectations poll in August compared to July shows all countries with a drop off, including large drop-offs, in inflation concerns. Euro area expectations fall to 2.4 in August from 10.4 in July. In Germany, that expectation falls to a net diffusion reading of 1.8 from 14.9 in July. There is a sizeable drop off in China too, which logs 5.3 in August compared to 12.9 in July. The U.S. improvement is smaller at 11.8, down from 15.0 in July. While the diffusion readings are different across these countries, the percentile standings are fairly similar. The euro area, Germany, and China all have percentile standings in the range of roughly 36th to 38th percentile, while the U.S. percentile standing is lower at its 26th percentile. Despite what we are seeing in markets, the ZEW experts are undeterred in their inflation outlooks.

Expectations for short-term rates: Short-term interest rate expectations don't change in the euro area. There is some further backing off in the U.S. and substantial downshifting in China where there's a sign change to -2.1 in August from plus 8.8 in July. In August, the euro area has a nearly 80th percentile standing for its diffusion value. The U.S. has a slightly below-median 48th percentile standing, and China has a slightly above median standing at its 52nd percentile.

Long-term rates moderate: Long-term interest rate expectations show some moderation in August to pair with moderate queue standings. Germany falls to 24.2 in August from 27.7 in July, the U.S. steps back to 27.7 from 30.8 in July, and China backs down to a diffusion value of 12.3 from 17.0 in July. Germany and the U.S. have rankings around their 33rd percentile mark, while China has a ranking around its 55th percentile mark. Despite the lower diffusion reading, Chinese long-term rate expectations are high relative to historic experience in relation to the U.S. and Germany.

Upbeat on Stocks: One interesting feature is the positive outlook on stocks in August, with all four responding areas, the euro area, Germany, the U.S., and China, logging diffusion values close to 40. These are up from readings that were bunched around the 20 to 25 diffusion mark in July. Despite the clustering of the diffusion values, the queue percentile standings vary quite a lot. For China, the current reading, which is the weakest diffusion reading for stocks in the table of the four, has a 92.3 percentile standing. The U.S. has a 74.4 percentile standing, and the euro area has a 59.3 percentile standing. Germany has the lowest percentile standing, just below its median at a 49.7 percentile mark.
by:Robert Brusca
|in:Economy in Brief
Japan| Aug 17 2026
Japan’s IP Emerges as Stronger
Japan's industrial production was revised up to show a 2.2% gain in June after falling by 0.5% in May. Industrial production in Japan is accelerating, showing a 2.5% growth rate over 12 months, a 7.9% annual rate over six months, rising to a 9.8% annual rate over three months. Manufacturing is accelerating in step with the total industry measure.

Key industries like textiles and transportation show acceleration underway or something close to it. In the case of transportation equipment, a 6.4% growth rate over 12 months rises to 14.7% over six months, although it steps back to a 12% growth rate over three months. That's still a great acceleration over its growth rate for the full 12 months, doubling that pace.

Japan's mining industry shows all negative numbers, with declines in each of the last three months and with sequential growth rates showing sharper and faster declines in output over shorter periods.

Utilities delivering gas and electric services showed a sharp decline of 4.7% in June. Sequential growth rates for this sector are negative as well but equivocally decelerating. We see a -7.1% pace over 12 months, which improves to -6.4% over 6 months, and then worsens sharply to a -14.4% annualized rate over three months.

The just-ended quarter (quarter-to-date) shows industrial production up 2.4%, with manufacturing up only 0.8%, both at annual rates. Consumer goods output is up with a sharp 5.4% annual rate in the quarter, and intermediate goods output is up by 1.2%. Investment goods output is declining at a 1.1% annual rate, and mining is falling at a 16.5% annual rate. Electricity and gas utilities show growth rates in the quarter as negative as well.

Japan has had a difficult run since COVID struck. All of the industry breakdowns in the table show declines compared to their levels of activity in January 2020, five and a half years ago. That is stunning and widespread weakness. The economy is adapting. Manufacturing is showing some encouraging acceleration over the past year despite challenges aided by yen weakness. Global conditions are still touch-and-go with such high oil prices and turbulent conditions in the Middle East.
by:Robert Brusca
|in:Economy in Brief
Europe| Aug 13 2026
EMU IP Flat to Lower on the Month
Industrial production in the euro area was flat in June, interrupting a four-month string of increases that had been in place. Despite the flatness and the decline in manufacturing output in the month, trends still show that output is on an expanding path. Consumer goods output was particularly strong in June, up 2.7% month-to-month, led by a 3% increase in nondurable goods output. However, intermediate goods output fell by 0.8%, and capital goods output fell by 1.4%. Growth is a matter for the weighting-game more than a statement about breadth.

The sequential calculations that give us a look at trend show that output is accelerating overall, barely growing at a 0.1% pace over 12 months, edging up to a 0.6% annual rate over six months, and culminating at a 2.5% annual rate over three months. Manufacturing output similarly has a slow start but builds a head of steam to grow at a 2% pace over three months. Consumer goods output ramps up very sharply. Although it declines by 0.8% over 12 months, over three months it is up at a 38.3% annual rate, led by strong expansion in consumer nondurables with output surging at a 43.9% annual rate over three months. However, consumer durable goods are still lagging, with output falling by 2.7% over 12 months, although it is rebounding at a 1.8% annual rate over three months.

The story across countries is varied with many European economies showing output declines in June. Of the 14 early-reporting European economies in June, nine showed declines in output in the month. For individual European economies, Germany and Spain are on accelerating paths, while Italy, Luxembourg, and Greece are posting decelerating output patterns.

In the quarter to date, output is rising for most industrial categories across the monetary union. The exception is consumer durables, the only category showing a decline on a quarterly basis with the second-quarter results now in. Manufacturing output is up at a 4.6% annual rate in the quarter. Consumer goods output is up to a 12.3% annual rate. Intermediate goods output is up at a 4.2% annual rate, and capital goods output is advancing at a 3.4% annual rate. Of the 14 European countries summarized in the table, Austria, Malta, Greece, and Portugal are the only countries showing quarter-to-date declines in the second quarter.

For the most part, these readings are upbeat, showing acceleration in most of the overall European manufacturing categories. However, when we evaluate annual growth rates compared to historic norms, all of the industrial categories for the monetary union are below their historic medians except for intermediate goods output. Across the European economies reporting in this table, only five have output speeds taking them above their historic medians. Those are Finland, Italy, the Netherlands, Spain, and Greece. All the rest of the reporters are below the 50% mark. The median ranking across the monetary union economies is at its 44.5 percentile.
by:Robert Brusca
|in:Economy in Brief
Italy| Aug 12 2026
Italian Inflation Gets Prickly
Inflation in Italy rose 0.1% in July after being flat in June and rising 0.3% in May. The core HICP was not quite so lucky, rising 0.3% in July after declining 0.2% in June and rising 0.4% in May. The domestic inflation data from Italy show the headline rising 0.1% in July, flat in June, and rising 0.4% in May. The Italian core on its domestic measure rose 0.3% in July, was flat in June, and rose 0.3% in May.

HICP inflation has gotten unruly in Italy, rising 2.9% over 12 months, accelerating to a 5.2% annual rate over six months but then rising by only 1.6% at an annual rate over three months. Core inflation remains much better behaved but has seen some increasing pressure, rising 1.5% over 12 months, posting a 1.4% annual rate over six months, and rising at a 2% annual rate over three months.

The domestic measures of inflation show the headline is quite similar to the HICP headline, rising 2.9% over 12 months, accelerating to a 5.7% annual rate over six months, and posting a 2% annual rate over three months. The Italian core rate, however, accelerates steadily from 1.6% over 12 months to 2.2% annualized over six months and to 2.4% annualized over three months. It's not a terrible ramping up, but it is an acceleration; it takes the Italian core to a level above what the ECB projects as its target for the euro area as a whole.

Inflation diffusion in Italy over three months, six months, and 12 months is relatively well behaved at 53.8% over 12 months and over six months. There's a modest tendency to have more acceleration than deceleration; however, over three months the diffusion measure falls to 46.2%, indicating net deceleration. The net deceleration over three months is reassuring, with moderate three-month inflation rates having been posted on the various metrics cited above. However, even the slight acceleration tendencies are a little more disturbing, with the high headline inflation posted over six months and uncomfortably high near a 3% pace over 12 months.

On a quarter-to-date basis, inflation in the third quarter is off to a slow start, at 1.2% for the HICP and 1.4% for the domestic measure. Both the HICP and the domestic measures show core inflation higher at 1.8% for the HICP and at a 2.4% annual rate for the domestic metric.

The inflation problem in Italy isn't simply something that comes because of oil. Year-over-year, the headline for the HICP and the domestic measure are both under 2% in the quarter to date (QTD). But both measures are running at or above 2% in most of the sequential developments of inflation from 12 months to six months to three months. Core inflation is showing pressure for both the HICP and domestic measures sequentially as well as QTD. The Italian inflation report for July by itself is not so good as the monthly headline is well-behaved, but the cores are uncomfortable in both the HICP and domestic measures. Inflation clearly is not dead. It remains something to keep an eye on even in Italy where inflation trends had been better behaved.
by:Robert Brusca
|in:Economy in Brief
Netherlands| Aug 11 2026
Dutch Inflation Picks Up
Inflation in the Netherlands picked up in July compared to June. Both the June HICP and the domestic inflation index had shown declines. In July, the HICP posted an increase of 0.7% month-to-month while the domestic CPI gained 0.5%, both easily showing accelerations compared to June. Monthly inflation rates increased in July the same or greater than previously in May.

Sequentially inflation is not exactly busting out; however, the legacy of inflation is still a bitter pill for the ECB to try to swallow even for this small European economy. The total HICP is up at a 2.9% annual rate over 12 months; that rises to a 4% annual rate over six months and settles back down to 2.1% over three months. That deflation is mostly on the strength of the weak showing in June. The domestic inflation rate rises 3.1% over 12 months; it accelerates to 4.3% annualized over six months and then only backs down to 2.8% at an annual rate over three months, largely on the back of the decline posted in June.

The domestic components show inflation accelerating in all but three categories in July; eight of thirteen showed declines in June. Only two categories showed declines in May.

Sequentially, looking at the percentage changes from 12 months to six months to three months, the components are showing mixed results. However, for food and for alcoholic beverages & tobacco, inflation steadily decelerates from 12 months to six months to three months. Only recreation & culture show inflation accelerating over 12 months, six months and three months. However, if we look at inflation trends over three months compared to six months, and six months compared to 12 months, acceleration is present for housing & utilities, for healthcare, for recreation & culture, and for personal care & miscellaneous categories. The not-named categories have more complex patterns, not necessarily good or bad, just complex. The line on the table for diffusion shows us that over 12 months inflation is accelerating in 38.5% of the categories compared to what it had done a year ago. However, over six months, the category inflation rates are higher compared to 12 months in 61.5% of the categories. Over three months compared to six months, inflation is higher in 46% of the categories. By these diffusion calculations, inflation is accelerating over six months compared to 12 months but otherwise it is decelerating over three months and over 12 months.

As an overview, the 2.1% inflation rate for the HICP over three months looks excellent; however, in context, it's result of three months, two of which were terrible, one of which was excellent, and so that's not much to go on. The HICP progressive inflation rates other than three months are all too high at 4% and 2.9%; for the domestic CPI, the same statements are true, except that the three-month rate at 2.8% is even worse than for the HICP over three months. The inflation diffusion statistics by themselves are not bad over three months, showing inflation accelerating in only 46.2% of the categories. That's a pretty good result and inflation accelerating over 12 months in only 38.5% of the categories. But the six-month pace is too high, and the question is where the three-month number is going to settle in once we move down the road; the good June inflation statistic beginning to fade and drop out is another issue. June increasing is looking like an outlier.

So that's a significant question on the outlook for inflation, and it's basically a question that we ask for every country because we had that break because of the hopeful situation that had arisen around the Strait of Hormuz and the prospect of oil prices going back down. Now that prospect appears to have passed and we're not quite sure where we stand. That puts the outlook and all the trends in a danger zone.
by:Robert Brusca
|in:Economy in Brief