U.S. and European Economies
2022-09-23
■ U.S. Economy Inflation caused by economic supply-demand crunch
■ European Economy? Increasing wage pressures
In August, the Consumer Price Index (CPI) showed that、while the pace of increase in the Composite CPI (+8.3% y/y) has slowed down, Core CPI excluding food and energy (+6.3% y/y) rose at an accelerated pace for the first time in 5 months. Although gasoline prices fell sharply on a month-over-month basis, significant increases continue in a wide range of sectors, including food, rent, and medical services. The downward pressure was offset.Inflation caused by tight economic supply and demand has been unstoppable, the results suggest the need for monetary is tightening.
Retail sales of August(+0.3% m/m) increased for the first time in two months. However, since the previous month's figures were revised downward, so it's still below the level of two months ago. Core sales excluding automobiles, restaurants, construction materials, and gasoline were almost unchanged from the previous month due to a sharp decline in gasoline sales following the price drop. Although the increase has slowed down, it is still above the level of two months ago.
Industrial production (-0.2% MoM) declined in August for the first time in three months. Although final goods (+0.1% y/y) and business facilities (+0.7% y/y) increased, but materials (-0.4% y-o-y) decreased. Facility utilization rate (80.0%) remains at a high level, which suggests that production activity remains robust.
Eurozone wages (+4.1% y/y) accelerated its pace of growth in April-June for the second consecutive quarter, it's the highest since April-June 2020.In addition, the labor cost index (+4.0%) continued to show a high rate of increase, although the pace of increase slowed somewhat from the January-March quarter, which was the largest increase in the past decade. By industry, wage pressures are particularly strong in the service sector (+4.9% y/y).
Germany's ZEW Business Expectations Index (-61.9 in September, down 6.6 points from the previous month) declined for the third consecutive month, reaching its lowest level since October 2008, just after the Lehman Shock. Fuel and power shortages this winter are a strong concern, and institutional investors and financial experts surveyed foresee a further slowdown in the economy.