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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Jun 06 2013

ECB Move Will Not Significantly Impact Inflation

ECRI has just updated its Eurozone Future Inflation Gauge (EZFIG). The value of this forward-looking gauge lies in its ability to predict cyclical turns in Eurozone inflation.

Despite last month’s rate cut by the European Central Bank (ECB), a move that typically increases inflation expectations, the ECB reduced its 2013 inflation forecast today. This suggests that the ECB is not overly concerned about inflation, which is near a 38-month low.

The latest update to the EZFIG clarifies the future trajectory of Eurozone inflation, indicating whether the latest ECB inflation forecast is accurate and inflation will remain restrained.

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ECRI May 31, 2013

The latest drop in consumer spending is consistent with the recessionary plunge in yoy U.S. import growth into negative territory. More