U.S. and European Economies
2022-11-16
■ U.S. Economy ≫ Inflationary pressures beginning to ease, but consumer concerns still remain
■ European Economy ≫ The economic downtrend continues, but the sense of economic slowdown moderates
The core CPI excluding food and energy (up 6.3% year-over-year and 0.3% month-over-month), rose at a slower pace in October compared to last year and last month. Compared with last month, commodity prices began to fall, service prices rose at a slower pace, indicating that the rise in raw fuel prices temporarily slowed, supply constraints have eased, inflationary pressure is weakening.
Consumer confidence (54.7, down 5.2 points from the previous month) fell for the first time in five months, according to the preliminary report of the University of Michigan Consumer Survey for November. As things stand now, expectations are all down, but the decline is particularly pronounced in the current situation, indicating stagnation in personal consumption. In addition, consumer inflation expectations (1-year: 5.1%, 5-year: 3.0%) rose for the second consecutive month, indicating that inflation concerns are rising again.
Eurozone retail sales (up 0.4% MoM) increase for the first time in four months in September. Telecom and Internet sales rose sharply compared to the previous month, driving the overall sales performance. However, the underlying tone is shifting from flat to downward, suggesting that consumer spending growth is slowing as the economy slows.
German industrial production (up 0.6% MoM) increased in September for the first time in three months. By industry, production declined in construction and energy-related industries. In commodities, consumer and capital goods rebounded, but intermediate goods, still affected by supply constraints, declined.
The Eurozone Sentix Investor Confidence Index (-30.9, up 7.4 points from the previous month) rose for the first time in three months in November. However, it continues to be in large negative territory and shows no sign of a trend change. On a breakdown, both current and expected conditions have risen, and I believe that high natural gas prices have been curbed and concerns about power supply have eased.