The Day at a Glance | December 13 2023

Consumer inflation in the US remained unchanged on a monthly basis in October, and the core component showed signs of deceleration. 

Producer inflation in the US increased by 0.9% y/y in November, logging moderation compared to October (1.3% prev.) and setting slightly below the estimated 1.0% y/y. 

The Eurozone´s industrial production deteriorated more than expected in October and reinforced the idea that the block is in a recession. 

Industrial production in Mexico positively surprised in October with 0.6% m/m growth (0.0% e.) and 5.5% y/y (4.1% e.), boosted by the construction sector. 

Today at 1:00 pm, the last monetary policy decision of 2023 will be announced by the US Federal Reserve; it´s widely expected that the FED will keep interest rates unchanged for the third consecutive meeting. 

 Economic environment 

Consumer inflation in the US, measured by the Consumer Price Index (CPI), decreased to 3.1% y/y in November. The reading set in line with market expectations. And, on a monthly basis, the CPI shifted from stagnation in October to marginal acceleration (0.1%). Breaking down said figure, service prices accelerated to 0.5% m/m (+0.2pp) and were driven by the housing component (0.4% m/m vs. 0.3% m/m prev.) and continued significant changes in transportation (1.1% m/m vs. 0.8% m/m prev.). On the other hand, the energy category declined again, although to a lesser extent than the previous month (-2.3% m/m vs -2.5% prev.), with gasoline standing out with a -6.0% m/m decrease, compared to a previously logged -5.0% m/m figure. With this, excluding the most volatile elements such as energy and food, core inflation logged a 0.3% m/m figure, slightly higher than October´s 0.3%. Core inflation´s annual figure remained unchanged at 4.0%, matching market estimates. It´s important to point out that the housing category continues to act as the main contributor to core inflation as it recorded an annual 6.5% reading. Additionally, producer inflation in the US increased by 0.9% y/y in November, logging moderation compared to October (1.3% prev.), slightly below the estimated 1.0% y/y. 

In the Eurozone, industrial production fell more than expected in October. The Eurozone’s industrial sector recorded a monthly -0.7% decline, moderating the -1.0% m/m contraction logged in September. Also, the latest reading negatively surprised as it set above the market´s estimate of -0.3% m/m. The decline in the Eurozone´s industrial activity was led by the production of capital goods, which decreased by -1.4% m/m, breaking a two-month positive streak. Similarly, the production of intermediate goods fell at a faster pace than in the previous month (-0.6% m/m vs. -0.4% m/m prev.), while the production of non-durable goods also logged a -0.6% m/m figure. On the other hand, energy production as well as durable goods production showed positive readings: 1.1% m/m and 0.2% m/m, respectively. On an annual basis, industrial production recorded a -6.6% decline, significantly higher than the -4.6% expected by the analysts’ consensus. With this, the block´s industrial activity has logged contractions in 8 consecutive months, reinforcing signs that the Eurozone´s economy is already in a recession.