Inflation data for developed markets

US: CPI increased 3.2% year-on-year 

US inflation numbers released this week show that the overall cost of living, as captured by the Consumer Price Index, increased 3.2 per cent from a year ago, with an increase of 0.4 per cent month over month.

The monthly measure was in line with expectations, while the 12-month reading was marginally higher. An increase in energy costs, reflecting global oil price fluctuations and domestic energy policy changes, helped to boost the headline inflation numbers, while food price rises slowed.

This deceleration was greater than expected, possibly due to better supply chain conditions and agricultural outputs.

EU: inflation continues to decelerate

This heatmap tracks the annual percentage change across the major items in the EU’s inflationary basket of goods and services. It is important to note that food and non-alcoholic beverages, transport, and housing have the highest weighting in the basket, in that order.

Headline inflation decelerated to 3.1 per cent on an annual basis, down from 3.4 per cent The highest inflation points were in non-alcoholic beverages, tobacco, water and insurance, potentially reflecting changes in consumer habits following the pandemic and regulatory impacts on insurance and tobacco products.

On the other hand, milk, cheese and eggs, communication, and transport services all experienced almost no or even negative annual inflation. This may be attributable to market competition keeping prices down as well as technological advances improving productivity and reducing costs.

Japan: inflation cooling, with utilities key contributors

Japan’s overall inflation has been cooling, driven by price drops for electricity and gas. Several food items have also shown moderation in prices.

On the other hand, prices for transportation, medical care, culture and recreation are rising, perhaps in line with service costs and wages. These may be driven by demographic changes such as an ageing population and labor shortages.

The {{nofollow}}Bank of Japan closely monitors wage growth as a key determinant in deciding the timing and degree of adjustments to its yield curve control and negative interest rate policies.

UK: a mixed inflationary picture

This heatmap tracks the evolution of inflationary items in the UK. The highest-weighted items are restaurants and hotels, recreation and culture, and transport. Across these, insurance, tobacco and alcoholic beverages prices rose fastest, reflecting tax policy changes and post-Brexit dynamics.

Conversely, gas and electricity fell the most – by 26.5 per cent and 13 per cent respectively, which may be due to government policy interventions and shifts in global energy markets.

Sweden: inflation driven by housing

The weak Swedish crown has made the Riksbank’s task to slow inflation a tough nut to crack for an economy reliant on energy and commodity imports. While several categories are showing a slowdown in price increases, Swedish inflation is primarily driven by increasing housing costs.

These reflect both dynamics in the domestic market, such as limited supply in major cities and strict building regulations, along with the broader global economic environment.

Canada: positive news for disinflation

A real estate crisis continues to loom large in Canada, where high demand and limited supply have made shelter prices, both rented and owned, relatively hot categories. However, headline inflation rates have finally dropped below the upper target limit of three per cent, signaling a potential easing of price pressures across the economy. February's figures are expected to be released next week, raising the question of whether the downtrend will continue or be driven up again by real estate.

Meanwhile, tobacco prices have finally begun to drop, offering smokers some relief in an otherwise challenging market. This could be the result of changes in market dynamics and regulation affecting consumer behavior and company pricing strategies.