The Day at a Glance | May 11 2023

The Top

*Inflation in China increased at its slowest pace since early 2021. 

*Today marks the end of the public health emergency due to Covid-19 in the United States. 

*Producer inflation surprised to the downside in the United States. 

*New unemployment claims in the United States increased to 264,000 in the week ending May 6th, higher than both the estimated 245,000 and the previous 242,000. Meanwhile, ongoing claims as of April 29th stood at 1.813 million, midway between the previous 1.805 million and the estimated 1.82 million. 

*In Mexico, nominal wages in the Federal Jurisdiction recorded a 9.32% increase in April, up from the previous 9.27%. 

*The Bank of England raised its interest rate for the twelfth consecutive time and placed it at its highest level since 2008 (2.45%; +25bp). 

Economic environment

The annual inflationary rate in China surprised to the downside in April, by recording a 0.1% figure (vs 0.7% prev.), and set below market expectations (0.4%e.). Moreover, this was the lowest reading since the deflationary period in February of 2021 amid an uneven economic recovery following the easing of COVID-related policies with greater price relaxation in both food and non-food products. Food inflation dropped to its lowest level in 13 months (0.4% vs the 2.4% prev.), due to a significant slowdown in pork prices and a more pronounced decline in vegetable prices. Additionally, non-food prices continued to decline (0.1% vs 0.3% prev.), driven by decreases in transportation prices (-3.3% vs -1.9% prev.) and housing prices (-0.3% vs -0.2% prev.). In contrast, inflation in the healthcare sector remained unchanged at 1.0%, while it accelerated in education (1.9% from the previous 1.4%). Core inflation, which excludes food and energy prices, remained steady at 0.7% y/y, the same as in March. On a monthly basis, consumer prices unexpectedly fell by 0.1%, marking the third consecutive month of decline and set below forecasts, which expected a flat reading.  

After more than three years, today marks the end of the public health emergency due to Covid-19 in the United States. This implies the immediate termination of certain programs, as well as some changes in the way data on Covid-19 is collected. However, the Centers for Disease Control and Prevention (CDC) stated that it will remain vigilant and will use more innovative methods, such as sequencing and wastewater testing. 

Producer inflation in the United States slowed down on an annual basis and set at 3.2%, down from the previous 3.4% figure and below the consensus estimate of 3.3%. On a monthly basis, inflation logged a 0.2% figure, also lower than the estimated 0.3% (-0.5% prev.). Meanwhile, the core component had a monthly reading of 0.2%, falling short of market expectations, and on an annual basis, it moderated its pace of growth to 3.2%, below the estimated 3.3% and the 3.4% logged in March.