Global Economic News Weekly Update

Global Economic News Weekly Update

Euro Area Inflation Steady at 2.5%

On February 24, 2025, Eurostat released data indicating Euro area inflation remained steady at 2.5%, matching the previous forecast. This figure represented the anticipated year-over-year change in consumer prices, as measured by the Consumer Price Index (CPI), which tracks price fluctuations based on typical purchasing habits. While the forecast held, it was noted that various factors, including geopolitical events, energy prices, and supply chain shifts, could influence future CPI movements, and that the 2.5% figure was a point-in-time estimate subject to change. It was also emphasized that inflation's impact varied across households and could affect future monetary policy. The next update is expected on March 3, 2025, with a stable forecast of 2.6%.

The United States Consumer Confidence Index Data

The United States Conference Board released its Consumer Confidence Index (CCI) on February 25, 2025, which revealed a decline in consumer confidence. The index dropped to 98.3, falling from the previously forecasted 104.1. This decrease suggested that consumers felt less optimistic about the economy's stability, as the CCI, a leading indicator based on a survey of household financial situations and expectations, signaled potential shifts in consumer spending. The decline in the CCI for February 2025 indicated increased consumer caution about the economic future, potentially leading to reduced spending, although it was emphasized that the CCI was one of many economic indicators that should be considered. The next release is on 25 March 2025, expecting a slight positive trend of 101.5.

US New Home Sales Data

On February 26, 2025, the Census Bureau reported new home sales at 0.680 million, slightly below the forecasted 0.698 million, indicating a potential shift in the US housing market. This indicator, tracking sales of newly constructed homes, suggested a possible decline, though it was emphasized that broader economic factors like interest rates and consumer confidence, along with data revisions, influenced the figures. The report also alluded to a potential, though complex, relationship between housing data and dollar quotes, while cautioning against drawing firm conclusions from a single data point due to the dynamic nature of the housing market.  The consensus for the next report on March 25, 2025, is 0.688 million.

The United States BEA Report

The United States Bureau of Economic Analysis (BEA) released on February 27th, 2025, reported that the US GDP growth remained steady at 2.3% for the quarter, matching the previous forecast. This figure, reflecting consumer spending, government expenditure, investment, and net exports, provided a snapshot of economic activity, though potential future shifts were acknowledged due to the dynamic nature of these factors. While the steady growth suggested economic resilience, geopolitical tensions, consumer behavior changes, and policy shifts were noted as potential influencers. Analysts were advised to adopt a probability-based approach to forecasting, acknowledging the range of possible outcomes rather than drawing definitive conclusions from the current data. The next report, dated March 27, 2025, is expected to be steady at 2.3%.

Core PCE Inflation Steady, Matching Expectations

The Bureau of Economic Analysis released Core PCE Price Index data, showing a forecasted 0.2% increase, matching the previous reading, indicating stable underlying inflationary pressures. This index, crucial for the Federal Reserve's inflation assessment, could prompt interest rate hikes if it exceeded expectations, or allow for unchanged policy if it fell short. The index also had potential implications for the US dollar, with higher readings potentially strengthening it and lower readings weakening it, though it was emphasized that forecasts were uncertain and the data should be interpreted cautiously within a broader economic context.