{"id":15014,"date":"2023-09-21T07:36:21","date_gmt":"2023-09-21T07:36:21","guid":{"rendered":"https:\/\/prosfunds.com\/news\/the-outlook-for-inflation-its-sticky\/"},"modified":"2023-09-21T07:36:23","modified_gmt":"2023-09-21T07:36:23","slug":"the-outlook-for-inflation-its-sticky","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=15014","title":{"rendered":"The Outlook For Inflation? It&#8217;s Sticky"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<p><strong>The near-term outlook for in\ufb02ation has deteriorated.<\/strong> S&amp;P Global Market Intelligence&#8217;s September forecasts for global consumer price in\ufb02ation have been revised higher in both 2023 and 2024.<\/p>\n<p>This partly re\ufb02ects the impact of higher crude oil prices. The prices<span class=\"paywall-full-content invisible\"> of some non-energy industrial commodities have also rebounded, although they remain well below the peaks of 2022.<\/span><\/p>\n<p class=\"paywall-full-content invisible\">Sticky core in\ufb02ation rates, particularly for services, are a prime concern given generally tight labor market conditions and elevated wage and unit labor cost growth.<\/p>\n<p class=\"paywall-full-content invisible\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/09\/saupload_cpiglobalflashsept2023.png\" alt=\"consumer price in\ufb02ation\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption><\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible\"><strong>Central bank rate cuts in advanced economies are some way off.<\/strong> The full effects of tighter \ufb01nancial conditions are yet to be felt, and most central banks maintain clear tightening biases.<\/p>\n<p class=\"paywall-full-content invisible\">Policy rate cuts in advanced economies are unlikely until mid-2024, given the challenging in\ufb02ationary environment. Futures markets are underestimating the potential for persistent underlying price pressures to delay<span class=\"paywall-full-content no-summary-bullets invisible\"> monetary policy pivots.<\/span><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>This year&#8217;s global growth forecast has edged up \u2014 but the outlook is patchy.<\/strong> Our global real GDP growth forecast for 2023 ticked up to 2.6% in September, although near-term economic prospects vary markedly across, and in some cases within, regions.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Strong momentum in the US remains the key driver of recent upward revisions to our global projections. We also revised up 2023 real GDP growth estimates for Japan, India and Brazil following stronger-than-expected second quarter data.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Forecasts for the eurozone and mainland China have again been reduced with a recession now forecast in the former.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">\n<figure class=\"regular-img-figure paywall-full-content invisible\" contenteditable=\"false\"><picture> <img decoding=\"async\" src=\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/09\/saupload_realgdpgrowthsept2023.png\" alt=\"Real GDP\" contenteditable=\"false\" loading=\"lazy\"> <\/picture><figcaption><\/figcaption><\/figure>\n<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>Global PMI data show alarming weakness.<\/strong> The JPMorgan Global Composite Purchasing Managers&#8217; Index\u2122 (PMI\u2122) compiled by S&amp;P Global fell for the third successive month in August and, at 50.6, was barely in expansion territory.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The global manufacturing output index was sub-50 for the third month straight, with the services equivalent down by over four points from its May peak. Forward-looking subcomponents signal further weakness ahead.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>The 2024 global growth forecast has been lowered again.<\/strong> We reduced the September global real GDP growth forecast to 2.3%. A marked slowdown in quarter-over-quarter growth rates is forecast over the coming quarters compared with the \ufb01rst half of 2023.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Downside risks include in\ufb02ation persistence, tighter \ufb01nancial conditions and escalating geopolitical tensions.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>A recession in western Europe is now our base case.<\/strong> Market Intelligence projects a mild &#8220;technical&#8221; recession in the eurozone during the second half of 2023, having forecast below-consensus growth outcomes since early in the year.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Weakness in the most industry-sensitive economies, including the largest, Germany, remains a key part of the story.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Momentum is also fading in the services-sensitive southern member states. While the UK&#8217;s large real GDP contraction in July was exaggerated by special factors, we retain our long-standing recession call.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>We revised up US annual growth yet still expect a marked slowdown.<\/strong> The September forecasts of US real GDP growth in 2023 and 2024 are marginally higher than in August, at 2.3% and 1.5%, respectively.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">This primarily re\ufb02ects unexpectedly strong consumer spending through July, which also boosts the 2024 annual growth rate owing to carryover effects. Still, measured on the basis of fourth quarter over fourth quarter, US growth will likely end 2024 well below trend.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>The outlook is mixed for Asia-Paci\ufb01c.<\/strong> Multiple headwinds will hinder the economic expansion in mainland China, and recent monetary stimulus will not make a material difference.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">With recent &#8220;hard&#8221; activity data exhibiting broad-based weakness, we have again lowered real GDP growth forecasts for 2023 and 2024 to 5.0% and 4.6%, respectively.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">In contrast, much stronger-than-expected GDP data in Japan and India have prompted upward revisions to this year&#8217;s growth forecasts.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>US dollar strength is proving more persistent than expected.<\/strong> Interest rate differentials have remained supportive, with US economic growth outperforming many peers and the Fed&#8217;s hiking cycle yet to conclude.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Accordingly, we forecast the real, trade-weighted dollar to remain somewhat stronger for longer than previously projected. Gradual dollar depreciation is still expected given its current elevation and persistent US current-account de\ufb01cits.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><em>Original Post<\/em><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>Editor&#8217;s Note:<\/strong> The summary bullets for this article were chosen by Seeking Alpha editors.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4636446-the-outlook-for-inflation-its-sticky?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The near-term outlook for in\ufb02ation has deteriorated. S&amp;P Global Market Intelligence&#8217;s September forecasts for global consumer price in\ufb02ation have been revised higher in both 2023 and 2024. This partly re\ufb02ects the impact of higher crude oil prices. The prices of some non-energy industrial commodities have also rebounded, although they remain well below the peaks of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":15015,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[38],"tags":[],"class_list":{"0":"post-15014","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Outlook For Inflation? It&#039;s Sticky | Prosfunds<\/title>\n<meta name=\"description\" content=\"The near-term outlook for in\ufb02ation has deteriorated. 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