Euro zone inflation hits record high of 10.7% as growth slows sharply
cnbc.com
cnbc.com
> This proved to be the case once again, with energy costs expected to have had the highest annual rise in October, at 41.9% from 40.7% in September. Food, alcohol and tobacco prices also climbed in the same period, jumping 13.1% from 11.8% in the previous month.
Without knowing the rate of inflation between Sept 2021 and Oct 2021, there is no way to interpret these numbers.
Put another way, we have two equations in four unknowns. If X is prices in Sept 2022, and Y is prices in Oct 2022, then we have:
X = 1.407 * V
Y = 1.419 * Z
There is no way to solve for the ratio of X to Y.
We’re barely a year into it and haven’t even seen the top yet.
Someone correct me if I'm wrong.
Sure, they won't go back to zero as they were before, but still they're not as high as the US, despite the EU being in a worse economical situation because, you know, with the war and energy shortages and all, along with the devaluation of the Euro vs the USD.
>When I see people predicting rates will go back down next year I chuckle.
I think it's mostly people, like my friend, who put all they had in stocks and crypto and saw a huge chunck of their portfolios wiped out and now wish for a new bull market as soon as possible.
The economic situation is actually not that terrible, with highest employment in more than 15 years in many countries. Of course energy is a worry and issue but it's not the end of the world either.
It is indeed unlikely for rates to go down next year but it is possible that they will reach a plateau while inflation goes down.
In the meantime inflation is actually very good for public finances and is healthily impacting the inflated asset prices which is nice.
Sorry, but knowing the way many countries count unemployment, that doesn't mean shit. In my country, you're only part of the unemployment statistics if you receive unemployment benefits and only that. If you're taking a paid course by the unemployment office, like learning the local language so you can get a job later, or just not working without receiving unemployment benefits because you're not entitled to them, or if you're a refugee who can't work, or homeless, or some of the other dozens of cases where you still get money from the government but not working, you're not counted as part of the official unemployment statistics even though you don't have a job and you're not contributing to the local economy in any way. Knowing this, low unemployment numbers mean little to me, especially when housing and living costs are at an all time high while wages are stagnating.
> In the meantime inflation is actually very good for public finances and is healthily impacting the inflated asset prices which is nice
Excuse me but how is this high inflation good for public finances and inflated assets?
Where I live, I and most of the population, saw a massive increase in cost of living (that's why the people with shopping carts protesting in the article), with 30% to 100% increase in everyday prices like groceries and bills, while my salary increase by less than 4% (and I work in tech, others got even less), while rent and asset prices like real estate have proven to be inflation-proof, even beating inflation and rising above what inflation could erode from them.
So what personal advantage did I miss from this, as my bank account is not seeing it, and a lot of Europeans around me are having too much month left at the end of their salaries.
There are standardised ways to measure unemployment and all major countries provide the necessary data to measure them in a comparable way, even if they might choose to highlight different measurement types.
So when the OECD reports on unemployment rates they do so in a harmonised way that uses the same definition for all. e.g. https://data.oecd.org/unemp/unemployment-rate.htm
Another example is that Eurostat defines actively working as having at least one hour of work a week, just in order to create a useful basis for comparison. The Netherlands defines it as at least 12 hours a week, so the commonly published Dutch number will be different than the Eurostat one. It doesn't matter though because the underlying data is still available for a direct comparison.
Are you referring to your situation or others? Because, Germany and many other governments are announcing packages for aid to get through. I’d say that itself is a good enough indicator on how “not that terrible” the economy is
https://www.lynalden.com/ecb-trapped/
For decades, whenever economic growth was sluggish, central banks would reduce interest rates and encourage more credit growth (a.k.a. debt accumulation) which leads to spurts of economic growth. Whenever the economy was booming, they would increase interest rates and discourage credit growth, to try to cool things off.
The problem is that this level of micromanagement, with an understanding that the core system would always be bailed out if need be, contributed to higher and higher debt levels relative to GDP, both in private and public realms, and lower and lower interest rates.
During the past four decades, the increase in debt over time was always offset by reductions in interest rates, so that the cost of servicing that debt never really went up.
Eventually, however, major central banks all reached zero or even slightly negative interest rates, and there wasn’t realistically any lower to go. Any further debt increases at that point would be hard to offset by lower interest rates. The cost of serving the debt relative to GDP and incomes would actually start to rise.