The Day at a Glance | January 12 2022

The Top

*Inflation in the U.S. set at an annual 7% rate in December, in line with estimates.

*Powell is confident that the FED can control inflation without affecting the U.S. economy`s growth.

*Inflation in China becomes more moderate (1.5% annual, Dec.); room for maneuver is still wide for greater monetary stimulus in the economy to be carried out.

*International oil prices reached their highest level in 2 months after the API confirmed lower inventory levels in the U.S.

*Concerns increase regarding new issues on supply chains and lower levels of growth due to the virus`s fast spread in China.

*Mexico logged a record number of daily COVID-19 cases (33,626).

*Economic indicators: Inflation for producers slowed down during December (10.3% annual, Dec.).

Economic environment

Inflation in the United States reached a 7% annual rate. According to figures made public by the U.S. Bureau of Labor Statistics, consumer inflation increased 0.5% during December and accelerated to a 7% annual rate, in line with analysts` estimates. However, underlying inflation grew slightly more than estimated by recording a 0.6% monthly rise (vs 0.5%e.) and a 5.5% annual rate (vs 5.4%e.). This is the eight consecutive month in which inflation exceeded 5%, the third above 6%, and December logged its highest rate of inflation since February of 1982. The rise in food prices became more moderate with respect to previous months (0.5%) and energy prices receded (-0.4%), which contributed to a slower increase in general inflation compared to what was observed in previous months. In fact, this was the lowest monthly rise in inflation since September. However, there were no signs of a slowdown among underlying components. Commodity prices increased and logged their highest monthly rate of inflation (1.2%), boosted by used automobile prices (3.5%) and clothing (1.7%). Regarding services, there was a slight moderation during the month (0.3%) after a decrease was logged in transportation services (-0.3%), and a slowdown occurred in housing prices (0.3%). December is expected to mark a peak in inflation and inflation will start logging a descent in in 2022.

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