Consumer prices in the United States rose more than expected last month, which will likely prompt the Federal Reserve to raise interest rates by 75 basis points for a third consecutive meeting next week.
UK inflation remained near its highest level in four decades and the economy barely grew as industrial production and construction weakened. In Argentina, inflation rose the most in three decades and prompted the central bank to raise its benchmark rate to 75% in a bid to prop up its currency.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
WE
Consumer prices in the United States rallied last month, dashing hopes of an incipient slowdown and likely securing another historically large interest rate hike from the Fed. Against a backdrop of robust labor market conditions that have pushed up wages, there is a good chance that the central bank will become all the more aggressive in further loosening the veils of the economy in a bid to lower the inflation.
BloombergPresident Joe Biden hailed a tentative railroad labor deal, which he helped broker and which averted an economically perilous nationwide work stoppage less than two months before November’s midterm elections . The shutdown would have been the largest of its kind since 1992 and threatened to cost the world’s largest economy more than $2 billion a day.
Europe
BloombergUK inflation has fallen from its highest rate in four decades after the oil price drop, still leaving the pace of price increases uncomfortably high for the Bank of England. The consumer price index rose 9.9% in August from a year ago, compared to 10.1% in July.
BloombergBritain’s economy recovered more slowly than expected after a recession triggered by an additional bank holiday in June, as industrial production and construction both declined.
Asia
BloombergJapan’s trade deficit hit a record high in August that highlights the growing pain of the weak yen as import costs soar, adding pressure on the country’s economic recovery.
BloombergChina’s economy showed signs of recovery in August as Beijing rolled out stimulus to counter a slowdown, although a slump in the property market and Covid outbreaks continue to weigh on the outlook. Industrial production, retail sales and fixed asset investment all rose last month more than economists had expected.
Emerging Markets
BloombergArgentina’s central bank raised its benchmark interest rate for the ninth time this year to 75% in a bid to prop up its currency and reduce inflation to nearly 100%. Central bankers gradually raised rates at the start of the year, but in the past three months have stepped up the hikes, with a combined increase of 23 percentage points since July.
BloombergIndia’s central bank, which pledged last month to do “whatever it takes” to fight inflation, is expected to refocus its efforts on its own version of a soft landing where it tackles price gains while trying to ensure that growth remains among the fastest in the world.
BloombergFrom Mexico to Brazil, persistently high inflation is widening the gap between rich and poor in what is already the most unequal region in the world. This is stoking political upheaval that could be a taste of what lies ahead as policymakers around the world struggle to meet demands for increased social spending.
World
BloombergAround the world, soaring borrowing costs are straining homebuyers and owners alike. From Sydney to Stockholm to Seattle, buyers are retreating as central banks are raising interest rates at the fastest rate in decades, driving house prices down.
–With help from Philip Aldrick, Andrew Atkinson, Maya Averbuch, Matthew Bristow, Maria Eloisa Capurro, Enda Curran, Katia Dmitrieva, Patrick Gillespie, David Goodman, Michelle Jamrisko, John Liu, Yoshiaki Nohara, Olivia Rockeman, Anup Roy and Ainsley Thomson.
