Global | Inflation and Bottlenecks Chartbook. December 2023

The downward trend in core inflation persisted in December, helped by a decline in core goods inflation. Headline inflation increased due to base effects. Geopolitical risk in Middle East East worsened, in turn pushing up freight costs. Our supply bottlenecks indicators inched up in December but remain at low levels.

Key points

• Key points:
• US headline inflation ticked up in Dec ‘23 (to 3.4% y/y from 3.1%), but core inflation edged down (to 3.9% y/y from 4%). Housing continues to be the stickiest component. Fed’ favorite measures PCE continued to moderate (2.9 y/y from 3.2%).
• Eurozone (EZ) headline inflation accelerated in Dec ‘23 (to 2.9% y/y from 2.4%), underpinned by the withdrawal of Covid support measures. However, core inflation declined more than expected
• Our inflation synchronicity indicators continued improving but there still are some items in the CPI basket in the US and EZ with inflation rates above the pre-pandemic levels
• Geopolitical risk in Middle East worsened as attacks in the Red Sea disrupted maritime routes, in turn pushing up freight costs but with a mild impact on delivery times or materials shortages in December 2024
• Our supply bottlenecks indicators inched up in December but still show only mild supply chain disruptions in Dec ‘23

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