, pub-5475981771945671, DIRECT, f08c47fec0942fa0

U.S. consumers' inflation expectations unchanged in December, survey shows

U.S. consumers' inflation expectations unchanged in December, survey shows

Short-term inflation expectations held steady in December after several months of increases and consumers became more optimistic about their job prospects, according to a survey released by the New York Federal Reserve on Monday.

The US consumer inflation expectations remained unchanged at an all-time high of 6% in Dec-21 for the second consecutive month.

Americans expressed higher concerns in regards to the inflation for the future home prices while inflation expectations for the next three years remained steady at the same level as the prior month.

Meanwhile, consumer’s views on the inflation uncertainty for the year-ahead softened as consumers anticipate prices of gas, food, and college tuition fees to drop. In addition, they were more optimistic on the outlook of the labour market conditions and their earnings.

“Looking ahead, the emergence of the new Covid-19 variant raises concerns that the supply chain bottlenecks could last longer than expected, and the cost-push inflation factors will continue to drive up consumer prices. Nevertheless, we opine the fading low-base effects will reduce the upward pressure on the CPI inflation going forward,” says MIDF.

Unemployment falls to 7.2% in the euro area and 6.5% in the EU in November

The rate of unemployment on the euro area fell one tenth in November compared to October, up to 7.2%, while in the whole of the European Union (EU) the monthly decrease was two tenths, down to 6.5%, according to the data published today by the Eurostat Community Statistical Office.

The eurozone unemployment rate dropped to a new pandemic low of 7.2% in Nov-21 (Oct-21: 7.3%), matching the market expectations. Compared to the preceding month, the number of people jobless dropped by 247K to 11.8m people.

In addition, the total youth unemployment rate fell to 15.5% (Oct-21: 15.8%), as the number of job-seekers under 25 years old plunged by 37K to 2.3m youngsters in Nov-21. Spain, Italy, and France registered the highest unemployment rates among the key euro area economies, while the Netherlands and Germany recorded the lowest during the month.

Taking into consideration the recent spike of Covid-19 cases and the reimposition of lockdown measures in certain regions of the economic bloc, this poses a downside risk to the euro area’s near-term labour market.

In the final MPC meeting of 2021 which was held last month, the European Central Bank decided to keep the benchmark refinancing rate unchanged at 0% going into next year, to support the economic recovery process. Given the recent developments in the economy and the to achieve the inflation target of 2%, the authorities announced they will stop the bond purchases under the Pandemic Emergency Purchase Program (PEPP) in the upcoming quarter as the program nears its end in March 2022.