The Day at a Glance | December 10 2021

The Top

*Inflation in the United States accelerates to a 6.8% annual rate in November, in line with estimates.

*Industrial production in Mexico increases less than what estimates forecasted in October: 0.6% m/m (vs 0.9%e.), 0.7% y/y (1.2%e.).

*Chinese Communist Party will prioritize economic stability and growth in 2022 with a flexible monetary policy and an effective fiscal policy.

Economic environment

Inflation continues to accelerate in the United States. The most recent figures on consumer inflation in the world`s largest economy confirmed a 0.8% monthly rate of acceleration in November, leading the annual rate of inflation to set at 6.8. This is the highest level of inflation since 1982. Underlying inflation increased 0.5% during the month and accelerated to a 4.9% annual rate. Energy resources continued leading the rise in prices with a 3.5% increase during the month (6.1% gasolines), while food prices became slightly more moderate with respect to previous months (0.7%). Regarding the underlying component, commodity prices maintained a constant pace of growth (0.9%), boosted by new vehicle (1.1% monthly), used vehicles (2.5%) and apparel (1.3%). Services also logged a constant increase in prices with respect to October (0.4% monthly) after an acceleration in prices in transportation services (0.7%) and persistent increases in housing (0.5%; 3.8% annual, its highest level since 2007). The data confirms that inflation continues to accelerate without reaching a peak, even though it`s estimated that it will reach 7% in the first few months of 2022. The increase in prices was widespread, which means that the theory of inflation being transitory is eroding. This reinforces the expectation of seeing the FED speed up the process of withdrawing stimuli in its meeting next week.