In-case-you-missed-it Monday: the real stories that mattered in the financial papers this week.
US inflation – Good, but ugly
The monthly US inflation print fell in the month, which is a good thing. But looking through the choppiness of recent months, its starting to look like inflation is trending up, which is ugly.
Especially when you break it down and see that the share of components of the CPI’s basket of goods where prices are rising at more than 2.5% (The Fed’s target) remains well above average.
This is a little worrying for Australia. Our CPI has been tracking the American one pretty closely, so it might be too early to declare “Mission Accomplished” just yet. We’ll need to see some pretty shocking data if we’re to get rate cuts in this half of the year.
Rents – to the moon!
Rents in Australia have been on a tear-away since Covid. For detached housing, rents are up almost 40%! Units aren’t far behind. They’re still heading north with a rocket and showing no signs of peaking yet.
GDP: Good, but not if you’re a person
CBA published some interest chats that took a bit of gloss off the most recent GDP numbers. In total, GDP (aka ‘the economy’) is still growing. But the population is growing strongly too, and if you adjust for population growth, GDP per capita (the amount of economy per person) is looking pretty sick.
In large part this is driven by consumption. Overall consumption is holding up, but consumption per person is falling quickly. Households are cutting back.
Peak Democracy?!?
The EIU’s democracy index, which contains a bunch of things I don’t really understand, shows that the world is getting less democratic. Thankfully Trump and Biden both secured their party nominations this week. One of them will sort it out surely.
And that’s (pretty much) everything worth knowing in markets this week.
JG.