Week of Sept 14, 2024 Weekly Recap & The Week Ahead
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1. Core US Inflation Picks Up, Damping Odds of Outsize Fed Cut — the so-called core consumer price index — which excludes food and energy costs — increased 0.3% from July, the most in four months, and 3.2% from a year ago, Bureau of Labor Statistics figures showed Wednesday. The three-month annualized rate advanced 2.1%, picking up from 1.6% in July, according to Bloomberg calculations.
Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.2% from the prior month and 2.5% from a year ago in August, marking the fifth straight month the annual measure has eased and dragged down by cheaper gasoline prices.
2. Battery Maker Northvolt to Cut Jobs Amid Cooling EV Market — the Swedish battery maker is facing a challenging time as the adoption of EVs in Europe has slowed sharply on concerns over new trade tariffs, the withdrawal of some government incentives and a sluggish rollout of charging infrastructure. Meanwhile, European automakers are also facing increasingly stiff competition from lower-cost Chinese rivals, which have priced their vehicles aggressively and gained a foothold across Europe. The tougher backdrop recently saw BMW cancel a 2 billion euro ($2.22 billion) battery order, prompting Northvolt to reassess its growth strategy.
3. US Producer Prices Pick Up Slightly After Downward Revisions — the producer price index for final demand increased 0.2% from a month earlier following a flat reading in July, according to a Bureau of Labor Statistics report released Thursday. The median forecast in a Bloomberg survey of economists called for a 0.1% gain. Compared with a year ago, the PPI rose 1.7% — the least since early in 2024. A measure of producer prices excluding volatile food and energy categories climbed 0.3% in August from the prior month, and 2.4% from a year ago.
4. ECB Cuts Rates Again as Inflation Fades and Economy Stumbles — The European Central Bank lowered interest rates for the second time this year with inflation receding toward 2% and concerns about the economy building. The key deposit rate was cut by 25 basis points to 3.5% — as all analysts polled by Bloomberg predicted. The ECB reiterated that it can’t commit to a specific course for borrowing costs. Like its global peers, the ECB is getting more confident that consumer-price growth is returning to target following its historic spike. The euro zone’s 20-nation economy, meanwhile, is losing momentum. Households are failing to support the rebound that began earlier in the year and manufacturers remain in the doldrums due to soft demand from outside the single currency area.
The week ahead — Economic data from Econoday.com:
