Inflation remains high in most of world as it cools in the U.S.
Inflation remains high in most of world as it cools in the U.S.
Here’s a number you probably heard a lot about last week: 3%. It’s the annual rate of U.S. inflation — the increase in the Consumer Price Index — from June 2022 to June 2023. It’s the lowest inflation we’ve seen since the spring of 2021.
Now, some other numbers for you: 8.7%, 6.4% and 4.8%. Those are the latest annual inflation rates for the U.K, Germany and India, respectively.
The U.S. has now gotten ahead of much of the world in fighting inflation.
After nearly two years when the inflation news was mostly bad and consumer confidence tanked, the mood in America has turned more positive, says Mallory Newall at public opinion firm Ipsos.
“The U.S. is a brighter spot in terms of consumer confidence than some European countries,” said Newall.
In the U.K., inflation’s still nearly triple the rate in the U.S.
“You have higher inflation numbers there than even the rest of Western Europe, and sky-high food prices,” said Newall.
Some of the difference is timing. Inflation hit the U.S. in 2021, as consumers went on a pandemic spending spree.
Europe was hit hard in 2022, says Simon MacAdam at Capital Economics.
“In Europe — a far bigger increase in energy prices after Russia’s invasion of Ukraine. I mean — natural gas prices in the U.S. I think maybe double or trebled. In Europe they sort of rose by tenfold,” said MacAdam.
Inflation in the Eurozone is coming down, just slower and later than in the U.S.
And China has experienced virtually no inflation to begin with, as its economy has been insulated from pandemic-era energy and supply-chain shocks.
All in all, Adam Posen at the Peterson Institute for International Economics says we’re near the end of this ‘global economy grapples with inflation’ story.
“I think it’s going to be largely gone for the U.S., Western Europe, Canada, as well as never having appeared in China. So for a big share of the world economy, it’s going to go away,” Posen.
He says give it six months and you probably won’t be hearing me talk about inflation every few days on the air anymore.
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