European and American economies
2023-09-20
■ The US economy maintains strong consumption and production activities
■ European Economy - European Central Bank Slightly Relaxing Policies
In August's Consumer Price Index (CPI), core CPI excluding food and energy (up 4.3% year-on-year and 0.3% month-on-month) continued to rise at a slower year-on-year growth rate, but the growth rate has accelerated compared to the previous month. Although the rise in commodity prices has accelerated, housing costs, as the largest component, have slowed down, and overall, the inflation trend continues to weaken. The sharp rise in energy prices, especially gasoline prices, will focus on its impact on commodity prices in the future.
Retail sales in August (up 0.6% month-on-month) increased for five consecutive months. Although the downward adjustment since last month has been strengthened, the main contributing factor is the significant increase in gasoline prices due to price increases. The core sales revenue used to calculate personal consumption in real GDP, excluding cars, dining out, building materials, and gasoline (with a growth rate of 0.1%), only slightly increased, with a growth rate lower than the inflation rate.
Industrial production in August (up 0.4% month-on-month) increased for two consecutive months. Despite the mediocre performance of durable consumer goods such as automobiles, the growth momentum in corporate equipment, defense and aviation equipment, and energy remains unchanged.
In July, industrial production in the eurozone (down 1.1% month-on-month) experienced a significant decline in four months. Despite an increase in energy production, the production of capital goods and durable consumer goods has significantly decreased. Germany's three consecutive months of sluggish performance are eye-catching.
The German ZEW economic outlook index for September (-11.4, up 0.9 percentage points month on month) has risen for two consecutive months. However, due to the significant decline in the current situation index (-79.4) and the lack of clear signs of a bottom in the economy, an improvement in the economy cannot be detected.
At the European Central Bank (ECB) Council meeting held on September 14th, it was decided to raise the policy interest rate by 0.25%. The statement still stated that the future policy direction will be judged based on data, but also added the statement that "since the policy interest rate has reached the limit level and will be maintained for a long time, it will greatly contribute to achieving the inflation target", indicating a slight relaxation of the policy stance. The economic outlook of ECB staff has raised the Consumer Price Index (HICP) inflation rate to 5.6% for 2023 and 2024, and lowered the actual GDP growth rate for 2023-2025, indicating stronger signs of economic stagnation.
■ European Economy - European Central Bank Slightly Relaxing Policies
In August's Consumer Price Index (CPI), core CPI excluding food and energy (up 4.3% year-on-year and 0.3% month-on-month) continued to rise at a slower year-on-year growth rate, but the growth rate has accelerated compared to the previous month. Although the rise in commodity prices has accelerated, housing costs, as the largest component, have slowed down, and overall, the inflation trend continues to weaken. The sharp rise in energy prices, especially gasoline prices, will focus on its impact on commodity prices in the future.
Retail sales in August (up 0.6% month-on-month) increased for five consecutive months. Although the downward adjustment since last month has been strengthened, the main contributing factor is the significant increase in gasoline prices due to price increases. The core sales revenue used to calculate personal consumption in real GDP, excluding cars, dining out, building materials, and gasoline (with a growth rate of 0.1%), only slightly increased, with a growth rate lower than the inflation rate.
Industrial production in August (up 0.4% month-on-month) increased for two consecutive months. Despite the mediocre performance of durable consumer goods such as automobiles, the growth momentum in corporate equipment, defense and aviation equipment, and energy remains unchanged.
In July, industrial production in the eurozone (down 1.1% month-on-month) experienced a significant decline in four months. Despite an increase in energy production, the production of capital goods and durable consumer goods has significantly decreased. Germany's three consecutive months of sluggish performance are eye-catching.
The German ZEW economic outlook index for September (-11.4, up 0.9 percentage points month on month) has risen for two consecutive months. However, due to the significant decline in the current situation index (-79.4) and the lack of clear signs of a bottom in the economy, an improvement in the economy cannot be detected.
At the European Central Bank (ECB) Council meeting held on September 14th, it was decided to raise the policy interest rate by 0.25%. The statement still stated that the future policy direction will be judged based on data, but also added the statement that "since the policy interest rate has reached the limit level and will be maintained for a long time, it will greatly contribute to achieving the inflation target", indicating a slight relaxation of the policy stance. The economic outlook of ECB staff has raised the Consumer Price Index (HICP) inflation rate to 5.6% for 2023 and 2024, and lowered the actual GDP growth rate for 2023-2025, indicating stronger signs of economic stagnation.