Economy.com Daily Update: January 12, 2018

Today's Economy

Inflation data strengthen the case for a Fed hike in March.

Ending protected status for Salvadorans will take valuable workers out of the labor market.

The Canadian dollar is once again moving with oil prices after a months-long separation.

Central banks cut rates, but the scope for stimulus has diminished.

Commentary

Inflation and twin deficits will hinder growth in 2018.

Further yuan appreciation would hurt GDP growth in 2018.

Price growth in the major economies likely remained tepid in December.

China's Q4 GDP growth likely hit 6.8% y/y, unchanged from the third quarter's pace.

Today's Economic Indicators

World
Moody's Analytics Global CPI
Dec. 2017: 0.3%
Global inflation has been fairly stable over the past several months, but it remains too low in a number of developed economies, including the U.S.

France
Consumer Price Index
Dec. 2017: 1.2%
France's annual harmonised inflation held steady at 1.2% in December; however, consumer prices printed at 0.3% over the month, up from 0.1% in November.

Spain
Consumer Price Index
Dec. 2017: 1.1%
Spain’s headline CPI was confirmed at 1.1% y/y in December, slowing from 1.7% in the previous stanza because of a high base in December 2016, when oil prices bounced back.

Italy
Industrial Production
Nov. 2017: 0.0%
Italy’s industrial production disappointed in November.

India
Consumer Price Index
Dec. 2017: 5.2%

India
Industrial Production
Nov. 2017: 8.4%

Peru
Monetary Policy
Jan. 2018: 3%
The Central Reserve Bank of Peru extended its rate cutting campaign in its first meeting of the year.

United States
Consumer Price Index
Dec. 2017: 0.1%
The firming in the core CPI in December suggests that some inflation pressures could be developing, and it strengthens the case for the Federal Reserve to raise interest rates in March.

United States
Retail Sales
Dec. 2017: 0.4%
Retail sales ended the year on a high note with holiday sales exceeding expectations for many retail segments.

United States
Business Inventories (MTIS)
Nov. 2017: 0.4%
The stockpile build is back on track.

United States
ECRI Weekly Leading Index
January 05: 147.6
The U.S. economy is performing well and prospects are positive for the months ahead.

United States
California Manufacturing Survey
2018Q1: 61.8
The California Composite Index, measuring overall manufacturing activity, decreased from 64.9 in the fourth quarter of 2017 to 61.8 in the first quarter of 2018.