Chart of the Week
The latest news about inflation in the United States indicates that things are moving in the right direction, both for services and goods. In June, prices (excluding food and energy) limited their rise to +0.1%. Year-on-year, the rise was of +3.3%, with services contributing for +3.7% and goods for -0.4%.
If we observe the way prices evolve over a sliding year, prices of goods (excluding food and energy) fell by 1.7%. It is the first time that such a decrease has happened since 2004-2005. These prices had increased by 12% in early 2022, mainly due to supply chain problems.
These supply chain problems had particularly led to an increase of freight prices. Freight costs are now sharply increasing again, as it is shown by the WCI container cost indicator, which has increased by 87% over the last two months.
OUR ANALYSIS
At the end of 2023, freight costs firstly increased because of Houthi attacks in the Red Sea, which forced ships to divert to the Cape of Good Hope. As the journey took longer, the number of sailing ships increased, thus reducing transport capacity.
Shipping specialists expect prices to remain high at least until China’s Golden Week in early October. In the upcoming months, these costs may have an impact on the prices of goods (excluding food and energy) in Western countries, increasing therefore inflation.
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Written on July 12 , 2024. This is not an investment advice. Opinions subject to change.
See also: https://latribune.lazardfreresgestion.fr/en/which-factors-have-boosted-european-banking-profits/
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