This podcast episode discusses the upcoming interest rate decision by the US Federal Reserve and its implications for inflation. The episode analyzes recent consumer price inflation data, highlighting the presence of deflationary signals in certain areas. It emphasizes the significance of core inflation excluding shelter in reflecting the true underlying inflation pressures of the US economy. The episode also discusses the production data and economic activities in the UK and the Euro area. It mentions the importance of considering producer price inflation data from the US for a more accurate assessment of inflationary trends. The episode notes the significant structural changes in the UK, such as flexible working and online retail, which suggest better performance in growth and productivity than reported in the data. Lastly, the episode explores the continued decline in the Euro area's industrial production data and acknowledges the importance of manufacturing to the European and global economies.
Takeaways
• Recent consumer price inflation data indicates stable inflation on the surface, but deeper analysis reveals deflationary signals in certain areas.
• Core inflation excluding shelter reflects the true underlying inflation pressures of the US economy.
• Producer price inflation data from the US provides a better reflection of generic corporate pricing power.
• The UK has experienced significant structural changes, suggesting better performance in growth and productivity than reported in the data.
• The Euro area's industrial production data is expected to continue declining, highlighting the importance of manufacturing to the European and global economies.
