Economic Overview - The recent CPI report is described as "Swiss cheese," indicating it is incomplete and lacks comprehensive data [1] - Core commodities prices, excluding energy and food, are rising at a rate of 1.4%, which is unusual as this category typically deflates over time [2] - Services prices, excluding energy, are increasing at a slower pace of 3%, indicating a disinflationary trend, particularly driven by shelter cost disinflation [3][4] Inflation and Consumer Sentiment - The government has limited levers to reduce prices, with alleviating tariff cost pressures being a key mechanism to ease inflationary pressures on consumers [9][10] - The affordability crisis is influenced by both prices and wages; if wages rise faster than prices, consumer spending can be supported despite higher costs [8] Economic Growth Projections - The U.S. economy is expected to grow by 1.9% next year, supported by three fragile pillars: affluent consumers, AI investment, and asset price appreciation [11][14] - There is a risk of a potential AI-related bubble that could negatively impact stock market confidence and consumer spending, leading to reduced investment and hiring [12][13] Investment Trends - Investment in AI is anticipated to grow, not just among major players but also among firms integrating AI into their strategies, which will drive stronger growth in those sectors [16] - The economic outlook is characterized by increasing polarization, with affluent consumers and AI-focused businesses driving most spending and investment [17]

Core Insights - The U.S. Treasury Secretary Scott Benset stated that next year will be the year of the real economy [2][4] - Benset mentioned that a significant tax refund will be observed in the first quarter of 2026 [2][4] - He also indicated that the U.S. will experience "real wage growth" and "low-inflation growth" [2][4] - Benset predicts that the U.S. economy will recover to a growth rate of 4% by 2026 [2][4]

Core Insights - Chile's wage levels outpaced inflation in August, with a real wage index increase of 2.0%, marking 30 consecutive months of growth [1] Wage Growth - The average hourly wage in August was 7019 Chilean pesos, reflecting a year-on-year increase of 6.3% [1] - Female hourly wages averaged 6822 pesos, up 6.5%, while male wages averaged 7200 pesos, increasing by 6.2% [1] Sector Contributions - The commercial sector had the largest positive impact on wage growth, with significant contributions also from the education and construction sectors [1]

Group 1: Market Sentiment and Economic Indicators - Risk sentiment has declined in Europe, leading to a general drop in stock markets after an initial rise earlier in the week, with UK companies facing downgrades impacting stocks like Haleon, easyJet, and Domino's Pizza [1] - The UK labor market shows signs of weakness, with job vacancies decreasing by 10,000 and an increase in the unemployment rate, indicating a stagnation in employment growth [2] - Despite a stagnant job market, wage growth remains high at 4.8%, although real wage growth adjusted for inflation is only 1%, suggesting a decline in actual income [2][3] Group 2: Interest Rates and Inflation - The UK interest rate futures market does not anticipate significant rate cuts despite the weakening labor market, with expectations of less than one cut by March and slightly over one cut by July [3] - High inflation combined with a weak labor market raises concerns about stagflation in the UK economy, complicating the economic outlook ahead of the budget [3] Group 3: Currency and Commodity Movements - The British pound has appreciated by 0.3% against the US dollar, reaching a two-month high, as the UK economy lacks support for rate cuts [4] - Gold prices have reached a new historical high, driven by a weaker dollar, with mining stocks like Fresnillo leading gains in the FTSE 100 index [6] Group 4: US Market Dynamics - Despite pressure on European markets, US stock indices are expected to rise slightly, with major tech companies like Tesla, Alphabet, and Oracle driving the S&P 500 to new highs [7] - The performance of the "Magnificent Seven" tech giants has significantly influenced the market, with potential risks if the Federal Reserve's upcoming meeting does not align with market expectations [7]

Core Insights - The 2024-2025 Global Wage Report by the International Labour Organization focuses on global wage inequality and trends, indicating a negative growth in global real wages in 2022, a recovery in 2023, and the largest growth in 15 years expected in the first two quarters of 2024 [1][13][38] - Wage growth varies significantly across different economies, with G20 developed economies experiencing consecutive declines in real wages from 2022 to 2023, while G20 emerging economies maintained positive growth during the same period [1][39] - The report highlights that approximately two-thirds of countries with available data have seen a reduction in wage inequality since the early 21st century, although the income share of the lowest 10% of earners remains disproportionately low compared to the highest 10% [1][14] Wage Trends - Global average nominal wage growth has outpaced inflation, with a reported real wage growth of 1.8% in 2023 after a decline of -0.9% in 2022 [13][38] - The G20 developed economies saw a real wage decline of 2.8% in 2022 and 0.5% in 2023, while G20 emerging economies experienced growth of 1.8% in 2022 and 6.0% in 2023 [39] - Preliminary data for the first two quarters of 2024 indicates a global real wage growth of 2.7%, marking the highest increase in over 15 years [39] Regional Analysis - Wage growth is notably higher in the Asia and Pacific regions, Central Asia, and Eastern Europe, while regions like Africa and North America have seen slower or negative growth [1][39] - In 2022, only Africa, Asia and the Pacific, and Central Asia experienced real average wage growth, while other regions faced declines ranging from -0.8% to -3.7% [39] Inequality Insights - The report emphasizes that the income of the lowest 10% of earners accounts for only about 0.5% of total wages, while the highest 10% earn nearly 38% of total wages, indicating significant wage disparity [1][14] - Gender income gaps and the divide between formal and informal workers have widened, particularly in low- and middle-income countries, where the labor market is predominantly composed of informal workers [1][14] Policy Recommendations - The report suggests that promoting gender equality, formalizing the informal economy, and strengthening wage policies are crucial for reducing wage inequality and improving the living standards of workers [1][14]

Group 1 - The core viewpoint of the article highlights the continued weakness in Germany's private sector growth as indicated by the July PMI data, particularly in manufacturing [1] - Manufacturing PMI remains below the neutral line, suggesting ongoing fragility in the sector, although manufacturing output has expanded for five consecutive months, indicating signs of recovery [1] - The services sector is no longer a drag on economic growth, with new business volumes in July experiencing their first increase in nearly a year after ten months of decline [1] Group 2 - The improvement in economic outlook aligns with expectations, driven by real wage growth and expansionary fiscal policies that are likely to support overall economic stabilization [1]

Group 1 - The core inflation rate in Japan remains slightly below 2% [1] - The gap between core inflation and overall inflation is expected to narrow, but this process will take some time [1] - Continuous growth in real wages is crucial for the economy [1]

Core Insights - The Hungarian Minister of Economy has projected that real wages may increase by approximately 5% over the next few years [1] Group 1 - The forecasted growth in real wages is indicative of potential improvements in the purchasing power of consumers in Hungary [1] - This wage growth could positively impact consumer spending and overall economic growth in the region [1] - The statement reflects the government's optimistic outlook on the economic recovery and labor market conditions in Hungary [1]

Core Viewpoint - The Governor of the Bank of Japan, Kazuo Ueda, anticipates that real wage growth will support consumer spending, although the impact of wage increases on service prices has not been significant yet [1] Group 1: Wage Growth and Consumer Spending - Real wage growth is expected to bolster consumer spending [1] - The chain reaction of wage increases on service prices has not been substantial [1] Group 2: Tariffs and Economic Impact - It is currently difficult to determine whether tariffs will affect the neutral interest rate level [1] - Tariffs have a negative impact on resource allocation efficiency [1]