12thDecember 2023
Tuesday
Significant economic updatesare set for December 12th, with the UK scheduled to announce its Claimant CountChange and the US poised to release its Consumer Price Index (CPI) data.GBP – ClaimantCount Change
The number of unemployed individuals, despite being seen as a lagging indicator, is a crucial measure of the economy's health, as consumer spending closely aligns with labor market conditions. Additionally, unemployment rates are a key factor for policymakers in guiding the nation's monetary policy.
In October 2023, the UK saw an increase of 17.8 thousand in unemployment benefit claims, up from a revised figure of 9.0 thousand in the previous month. Historically, from 1971 to 2023, the average change in the UK's Claimant Count has been around 1.63 thousand. The highest recorded rise was 860.4 thousand in April 2020, with the lowest being a decrease of 169.2 thousand in June 2021.
The upcoming Claimant Countchange is projected to show a rise, with forecasts anticipating an increase to 25,000, up from the previous figure of 17,800. This anticipated change suggests a notable shift in the employment landscape, reflecting evolving economic conditions.
The release of the ClaimantCount Change data is scheduled for Tuesday, December 12, 2023, at 07:00AM GMT.
USD – Core CPIm/m
Consumer prices make up a significant portion of overall inflation. Inflation plays a crucial role in currency valuation, as increasing prices prompt central banks to hike interest rates in order to fulfill their mandate of containing inflation.
U.S. core consumer prices, excluding food and energy, rose by just 0.2% in October 2023, less than the expected 0.3% and down from September's 0.3% rise. This trend suggests a slowing U.S. economy and the significant effects of the Federal Reserve's stringent monetary policies. The services sector, minus energy, saw a reduced price increase of 0.3%, down from 0.6% in September. Additionally, commodity prices excluding food and energy fell for the fifth straight month, dropping by 0.1%, albeit less steeply than the 0.4% decline seen previously.
The prediction for the CoreCPI m/m suggests it will remain steady, continuing at a rate of 0.2%.
USD – CPI m/m
Consumer prices constitute the bulk of total inflation. Inflation significantly impacts currency value because, when prices increase, central banks often hike interest rates to adhere to their mandate of controlling inflation.
In October, the consumer prices in the United States remained unchanged, contrasting with the 0.4% increase in September and defying expectations of a 0.1% uptick. This stabilization was largely attributed to the shelter index, which continued to rise but at a slower pace of 0.3%, down from September’s 0.6%. This was offset by a significant 5% decline in the gasoline index, which had increased by 2.1% previously. Consequently, the overall energy index fell by 2.5% during the month, as the sharp drop in gasoline prices overshadowed rises in other energy sectors. In the meantime, the food index edged up by 0.3%, a slight increase from the 0.2% growth seen in the previous month. Breaking it down further, the index for food at home rose by 0.3%, up from the earlier 0.1%, while the index for dining out continued its growth at a steady rate of 0.4%.
TL;DR
Economic Indicator
October Change
September Change
Notes
1 Overall Consumer Prices
0.0%
+0.4%
Defied expectations of a 0.1% increase.
2 Shelter Index
+0.3%
+0.6%
Continued to rise, but at a slower pace.
3 Gasoline Index
-5.0%
+2.1%
Significant decline, influencing energy index.
4 Overall Energy Index
-2.5%
N/A
Decline due to sharp drop in gasoline prices.
5 Food Index
+0.3%
+0.2%
Slight increase from the previous month.
6 Food at Home Index
+0.3%
+0.1%
Increased compared to September.
7 Dining Out Index
+0.4%
N/A
Continued growth at a steady rate.
The projected monthly ConsumerPrice Index (CPI) shows a marginal increase of 0.1%, just above the zeropercent mark.
USD – CPI y/y
The bulk of overall inflation is made up of consumer prices. Inflation plays a key role in determining the value of a currency, as increasing prices often prompt the central bank to hike interest rates in line with their mandate to keep inflation in check.
In October 2023, the U.S. saw its annual inflation rate drop to 3.2%, below the expected 3.3%, mainly due to a 4.5% decrease in energy costs, including significant reductions in gasoline, utility gas, and fuel oil prices. Food price increases slowed, as did the growth in shelter and new vehicle costs, while prices for used cars and trucks fell. Conversely, there were rises in apparel, medical care commodities, and transportation services. The Consumer Price Index remained stable, recording the lowest rate in 15 months and not rising as anticipated, balanced by lower gasoline costs against increases in shelter, natural gas, and food. The core CPI, excluding food and energy, also increased less than forecasted, by 4% annually and 0.2% monthly.
TL;DR
Economic Indicator
October 2023 Change
Note
1 Annual Inflation Rate
3.2%
Below the expected 3.3%.
2 Energy Costs
-4.5%
Significant reductions in gasoline and other utilities.
3 Food Price Increase
Slowed Down
Compared to previous rates.
4 Shelter Cost Growth
Slowed Down
Lower rate of increase.
5 New Vehicle Costs Growth
Slowed Down
Compared to previous periods.
6 Used Cars and Trucks Prices
Decrease
Prices fell in this category.
7 Apparel Prices
Increase
Rise in prices noted.
8 Medical Care Commodities
Increase
Prices increased.
9 Transportation Services
Increase
Rise in prices observed.
10 Consumer Price Index (CPI)
Stable
Lowest rate in 15 months, no expected rise.
11 Core CPI (Excl. Food & Energy)
4% Annually; 0.2% Monthly
Increased less than forecasted.
The projected CPI y/y is expected to be 3.1%, marginally lower than the previous figure of 3.2%.
The upcoming Consumer PriceIndex (CPI) report is scheduled for release on Tuesday, December 12,2023, at 1:30 PM Greenwich Mean Time (GMT).
