Budget News

Market Speaks: Elevated Core Inflation In US And Europe Had Been Persistent
March 23,2023 14:15
The Bank of Canada Governing Council has noted in a latest update that while global economic growth continued to slow, it had been stronger than expected in some regions, notably the United States and the euro area. In the United States, growth was being supported by exports and government spending, and consumption remained solid. Economies in the euro area were proving more resilient than expected as disruptions to the energy market resulting from Russia’s war on Ukraine had been less severe than feared.
The reopening of China’s economy had been progressing broadly in line with expectations. To this point, global oil prices remained close to the levels assumed in the January outlook. However, if Chinese demand rebounds by more than expected, global energy and other commodity prices could rise sharply, putting upward pressure on inflation around the world. Although global growth had been slowing, labour markets were still tight, especially in the United States and Europe.
Unemployment in the euro area remained at a record low. In the United States unemployment was low, the ratio of job vacancies to unemployed people was high and wage growth was strong. Elevated core inflation in the United States and Europe had also been persistent. In the United States, lower core goods inflation was being offset by higher inflation for core services. In the euro area, core inflation had continued to rise while headline inflation had edged down.
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