Monday 15th November 2021
Hot on the heels of the surprising increase in inflation in the US earlier last week, Friday saw an unexpected fall in consumer sentiment. The Michigan survey hit an 11-year low. NAB’s Ray Attrill says previous low readings had been associated with rising COVID cases, but now, as the US seems to be faring somewhat better than Europe, the concern is all about rising prices. It’s a significant issue for the Fed and the US government, with wages rising significantly below the headline inflation rate. To counter being worse off, over 4 million Americans quit their job in one month. In Europe COVID itself remains a concern with restrictions reimposed in Holland and Austria. Could other countries follow as winter draws near? Today, activity data from China will be keenly watched, and later in the week the wage price index will highlight whether Australia too could become subject to wage-push inflation.