Charting the Global Economy: US Inflation Progress Stalls
(Bloomberg) -- US inflation is proving stubborn while consumer spending shows scant signs of any concerning slowdown, laying the groundwork for a more cautious approach to interest-rate cuts from the Federal Reserve.
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Even though inflation has dropped notably over the past two years, the government’s October consumer price report underscored the challenge facing Fed officials: ensuring their policy actions support the labor market while guarding against a reacceleration of price pressures.
Elsewhere, the European Commission sees a gradual firming in euro-area economic growth next year. China’s trade surplus is on pace to hit a record this year, highlighting its continued reliance on exports to compensate for weak domestic demand.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:
US
The so-called core consumer price index — which excludes food and energy costs — increased 0.3% for a third month. Over the last three months it rose at a 3.6% annualized rate, marking the fastest pace since April, according to Bloomberg calculations. Economists see the core gauge as a better indicator of the inflation trend than the overall CPI.
Retail sales advanced in October, boosted by a jump in autos purchases, while other categories signaled some momentum heading into the holiday season. Categories were mixed, but the upward revision to September sales suggests consumers entered the final months of the year on a stronger footing than previously thought.
US household debt climbed to a fresh high last quarter, with rising incomes leaving many consumers able to manage the burden, but lower-income groups showing signs of financial strain.
Europe
The euro area’s economic growth will pick up as obstacles to consumption and investment fade away, though geopolitics poses an increasing threat, according to the European Commission. Gross domestic product will increase by 1.3% next year and by 1.6% in 2026, the EU’s executive arm said.
Germany’s economy will hardly grow next year as underlying problems add to cyclical weakness, according to Chancellor Olaf Scholz’s independent panel of experts. Surveys point to poor sentiment, particularly after the election of Donald Trump in the US and the collapse of Germany’s government.