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Signs of a slowdown in soaring prices have been appearing for several weeks, particularly in Europe and North America. A beginning of good news for consumers and the authorities, but we are still far from the mark.
The inflation curve is slowly starting to flatten.
In the United States, the CPI price index, a benchmark, fell to 6.5% in December year on year. Admittedly, this remains significant, but the rise in prices was less marked than a month earlier. In November, the surge reached 7.1% over one year. The inflation rate is therefore still moving away from the peak of June when it exceeded 9% and reached the lowest level of 2022 at the end of the year.
Above all, if we compare not with the same month of the previous year but with the previous month, prices have fallen slightly: -0.1%, it’s very light, it’s all the same notable because it is the first decline since the Covid-19 epidemic put the American economy on hold, almost three years ago.
Another indication of a trend towards a slowdown in inflation: the sharper drop in production prices in December than analysts expected.
The United Kingdom and the euro zone also seem to have passed their peak. For the latter, after inflation above 10% in October, it fell to 9.2% over one year in December.
This is not enough to reassure
These indices, even if they are a reference, are not the only indices scrutinized by economists and they do not allow a complete panorama to be drawn up. All products do not see their prices evolve in the same way.
The slowdown is partly due to volatility in final energy demand, which tends to put the good news into perspective.
In France, for example, in an interview with JDD yesterday, Michel-Edouard Leclerc, the boss of the eponymous supermarkets, estimated that inflation would peak between April and June.
In the United States, prices for services, in particular, continue to cause concern.
And then, underlying inflation – a calculation which makes it possible to give an underlying trend – certainly remained stable at the end of last year, but high.
Be that as it may, despite the overall slowdown, inflation remains far from the target objective of 2%.
The ECB and the FED will therefore continue to raise their interest rates.
In Davos, Christine Lagarde, President of the European Central Bank, judged inflation ” much too high “. And yesterday, Klaas Knot, a Dutch member of the ECB’s Governing Council, argued for a 50 basis point hike in February and March.
As for the Fed, governors continue to want to conduct a monetary tightening policy. Rates are expected to remain high at least until 2024.
And this tightening has an effect on activity and on the stock markets
The equity market lost momentum in the middle of last week on signs of a slowing economy and toughness from central bankers. Friday, the statements of a governor of the Fed, who argued for a more moderate increase to 25 basis points against 50 last time, somewhat reassured investors.
On the other hand, in Japan, the Central Bank is sailing against the tide compared to its counterparts
The governor of the Japanese institution confirmed Friday that he would pursue an accommodating policy, a policy therefore favorable to consumption and by extension to inflation. Inflation in the archipelago certainly remained more moderate than in Europe and the United States, but with 4% over one year in December, it rose to a peak it had not reached since 1981.
The central banker is betting on a decline from February and is betting that, in this country which has long fought against too low inflation or even deflation, it will be less than 2% for the whole of 2023