The CNBC app, global market news in one place. Customizable sections and personalized alerts, stocks tracking, interactive charts and market insights, all in your hands. Stay connected, stay informed, download the CNBC app today.Uh, >> a very warm welcome to this Tuesday edition of Squawk Europe European. I'm Steve Sedick with Ben Bulos. Risk Gup will join us as well.Okay, these are your headlines. European equity futures point lower as Wall Street comes back online after the President's Day holiday with th ...

Economic Outlook - The UK has underlying fundamentals that could make it an attractive investment destination, but political uncertainty raises questions about its medium-term sustainability [1] - The current political climate is affecting investor confidence and spending decisions, which could slow economic growth [2] Bank of England's Monetary Policy - The recent split vote within the Bank of England's committee indicates a divide on future policy direction, with some members leaning towards rate cuts sooner than expected [3][4] - The analysis from the Bank of England staff suggests that the supply side of the UK economy is performing better than anticipated, influencing the committee's decision-making [4] Wage Growth and Inflation - Wage growth is projected to decrease sustainably, with expectations of it reaching 3.2% by year-end, which aligns with the Bank of England's forecasts [8][11] - Inflation is expected to decline to the target of 2% by April, but the labor market's performance will be crucial in determining future monetary policy [8][9] Labor Market Dynamics - The unemployment rate is anticipated to rise to around 5.2% to 5.3%, and any significant increase beyond this could signal concerns for the Monetary Policy Committee (MPC) [9] - The labor market's stability is critical, as any aggressive rise in redundancies could prompt a reassessment of the current economic outlook [9][10] GDP Expectations - The company forecasts GDP growth to be on the higher side, suggesting stronger underlying economic signals than previously thought [13]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **US economic outlook**, specifically the **inflation forecast for 2026** and its implications for monetary policy and investment decisions. Core Insights and Arguments 1. **Current Inflation Status**: Core PCE inflation is at **2.8% year-over-year**, above the Federal Reserve's target, primarily due to unexpected tariff impacts rather than strong underlying cost pressures [2][5][6]. 2. **Future Inflation Expectations**: - Core PCE inflation is expected to decrease to **2.1% by December 2026** and **2.2% on a Q4/Q4 basis**, which is **30 basis points below** the Bloomberg consensus and FOMC forecasts [2][26]. - CPI inflation is projected to be **2.1% on a Q4/Q4 basis**, which is **60 basis points below** the Bloomberg consensus [2][26]. 3. **Factors Influencing Disinflation**: - **Tariff Impact**: The contribution of tariffs to inflation is expected to decrease from **0.5 percentage points** currently to **0.2 percentage points** by December 2026, after peaking at **0.8 percentage points** in mid-2026 [6][7]. - **Shelter Inflation**: Anticipated to fall from **3.7% year-over-year** to **2.3%** by December 2026, which is below pre-pandemic levels [10][16]. - **Wage Growth**: Wage growth has slowed to target-consistent levels, which will exert downward pressure on nonhousing services inflation [11][14]. 4. **Risks to Inflation Forecasts**: - The risks appear balanced, with potential for both upward and downward adjustments due to tariffs and consumer cost burdens [31]. - Data quality concerns persist, with a **20% decline** in the number of prices collected for the CPI, leading to increased variability in inflation data [3][45]. Additional Important Insights 1. **Data Collection Issues**: The Bureau of Labor Statistics (BLS) has reduced its price collection efforts, which may affect the reliability of inflation data moving forward [3][45]. 2. **Healthcare Inflation**: Healthcare services inflation is expected to rise from **2.6% in 2025 to 2.9% in 2026**, influenced by higher supply and labor costs [11]. 3. **Monthly Inflation Forecasts**: - For December 2025, core PCE inflation is forecasted at **0.25%** and core CPI at **0.28%**, reflecting distortions from delayed data collection [33][37]. - For January 2026, core PCE inflation is expected to be **0.27%** and core CPI **0.26%**, influenced by typical seasonal price increases [37]. Conclusion - The economic outlook for 2026 suggests a return to near-target inflation levels, driven by a combination of reduced tariff impacts, softening shelter inflation, and moderated wage growth. However, ongoing data collection challenges and potential risks from tariffs remain critical factors for investors to monitor.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the U.S. economic outlook, specifically inflation trends and forecasts for 2026, as analyzed by Goldman Sachs. Core Insights and Arguments - **Current Inflation Status**: Core PCE inflation is at 2.8% year-over-year, above the Federal Reserve's target, primarily due to unexpected tariff impacts rather than strong underlying cost pressures [2][5][6]. - **Future Inflation Expectations**: - Core PCE inflation is expected to decrease to 2.1% year-over-year by December 2026, with a Q4/Q4 forecast of 2.2%, which is 30 basis points below Bloomberg consensus and FOMC forecasts [2][26]. - CPI inflation is projected to be slightly lower than PCE inflation, with a forecast of 2.1% for 2026 on a Q4/Q4 basis, which is 60 basis points below the Bloomberg consensus [2][22]. - **Factors Influencing Disinflation**: - **Tariff Impact**: The contribution of tariffs to inflation is expected to decrease from 0.5 percentage points currently to 0.2 percentage points by December 2026, after peaking at 0.8 percentage points in mid-2026 [6][7]. - **Shelter Inflation**: Anticipated to fall from 3.7% year-over-year to 2.3% by December 2026, below pre-pandemic levels, due to slower rent growth and increased supply [10][11]. - **Wage Growth**: Wage growth has slowed to target-consistent levels, which will exert downward pressure on nonhousing services inflation [11][14]. Additional Important Insights - **Data Quality Concerns**: There are ongoing issues with data collection, with a 20% decline in the number of prices collected for the CPI in 2025, leading to increased variability in inflation data [3][45][50]. - **Monthly Inflation Forecasts**: - For December 2025, core PCE inflation is forecasted at 0.25% and core CPI at 0.28%, reflecting distortions from delayed data collection [33][37]. - For January 2026, core PCE inflation is expected to be 0.27% and core CPI at 0.26%, influenced by typical start-of-year price increases [37][38]. - **Risks to Inflation Forecasts**: The risks appear balanced, with potential for both upward and downward surprises due to tariff changes and consumer cost burdens [31][32]. Conclusion - The analysis indicates a cautious but optimistic outlook for inflation in 2026, with expectations of a return to target levels driven by various economic factors, despite challenges in data collection and potential tariff impacts.

Labor Market & Economic Growth - The labor market shows weakness with the highest unemployment rate and lowest year-over-year wage growth in four years [2] - Despite weak job growth, the economy is still moving forward, avoiding a recession, but is described as a "sickly tortoise" [3] - The economy is expected to experience weak fourth-quarter GDP growth, potentially around 1% [9] - The economy may grow at 3% in the first half of next year and 1% in the second half, resulting in approximately 15% growth for the year if a recession is avoided [8] - Labor supply is limited, with a shrinking native-born working-age population and near-zero net immigration, making it difficult for the economy to grow beyond 15% of trend rates [7][8] Consumer Spending & Fiscal Stimulus - Consumer spending is expected to increase in the first half of next year due to income tax refunds, with the average refund projected to be $4,000, up from $3,200 this year [4] - The boost in consumer spending from tax refunds is considered temporary ("sugar, not protein") and unsustainable in the second half of the year [6] Investment & Sector Performance - While there's a significant data center boom, other investment spending, such as heavy truck sales and home building, is weak [10][11] - Low oil prices are hindering drilling activity in the energy sector [11]

Wage growth for the lowest-paid workers is starting to slow as a worsening jobs market undercuts the bargaining power of a section of the workforce that has proved resistant to the Bank of England’s inflation-fighting efforts, new data shows https://t.co/Leh8JknscY ...

So, President Trump is in Pennsylvania to talk about the economy and the report card though that he's giving his own economy is A+ plus. >> I wonder what grade you would give >> A+ A+. >> Yeah, A++.>> But talking to folks on the ground, including a great many of his biggest supporters, they're not quite grading on the same curve. What report card would you give the current economy. >> The current economy got a D. A >> D.I'd give it um All right. >> B plus. What report card would you do.>> C minus. >> I thin ...

Core Points - President Trump's new executive order exempts over 100 food and grocery items from reciprocal tariffs, which is seen as a common-sense approach given the U.S. does not produce many of these items domestically [1][2] - The focus on inflation is highlighted, with a specific mention of the inflation rates under Biden compared to Trump, indicating a significant increase in grocery prices and overall inflation during Biden's administration [4][8] - The discussion includes the complexities of beef pricing compared to chicken, emphasizing the longer supply chain for beef and its susceptibility to factors like drought [5][6] Inflation and Economic Growth - Cumulative inflation under Biden is reported at 21.3%, while under Trump it was about 3% [8] - Grocery prices have increased nearly 24% under Biden compared to 2.7% under Trump [8] - Wage growth is noted to be outpacing inflation this year, with a 4.2% rise in wages versus approximately 3% inflation [8][9] - Concerns are raised about the potential impact of the Schumer shutdown on GDP growth, estimating a reduction of 1 to 1.5 percentage points [10] Policy and Messaging - The importance of addressing inflation and affordability is emphasized, with a commitment to explain sector-specific improvements [10][11] - The healthcare sector is critiqued for benefiting middlemen rather than directly aiding consumers, indicating a need for reform [12]

Core Viewpoint - The upcoming quarterly wage price index is critical for determining the likelihood of an interest rate cut in Australia, with a figure below 3.4% potentially reigniting discussions for a cut in the first half of 2026 [1][2][4]. Wage Growth and Interest Rates - The wage price index currently stands at 3.4%, which aligns with market consensus and the Reserve Bank's forecast, indicating limited chances for a rate cut if this figure is maintained [1][6]. - Wage growth peaked in late 2023 at over 4%, but has since moderated to 3.4%, still higher than much of the past decade [6][10]. - A higher wage growth figure would diminish the prospects for an interest rate cut, suggesting that the current cycle of cuts may have reached its bottom [2][6]. Central Bank and Economic Indicators - The Reserve Bank of Australia (RBA) maintained the cash rate target at 3.6% in October due to higher-than-expected consumer price index inflation at 3.2% [8]. - The RBA's recent meeting minutes are expected to reflect a lack of enthusiasm for further rate cuts, as indicated by Governor Michele Bullock [7]. Banking Sector Scrutiny - Upcoming committee hearings in Canberra will question leaders from the big four banks regarding their practices, including interest rates and their impact on customers and employees [9][12]. - The committee aims to address concerns about the banking system's scrutiny and the timing discrepancies between RBA decisions and bank rate adjustments [12][13].

Core Insights - Growing pessimism among Americans regarding job security and inflation concerns is highlighted in the latest All-America economic survey [1][5] - A significant portion of the public expresses worry about job loss, with 26% concerned, an increase from previous surveys [2] - Despite job loss concerns, 58% of respondents feel confident about finding a similar job if needed [2][3] Job Security Concerns - 51% of the public is not worried about job loss or finding a new job, while 19% express concern [3] - Black and Latino adults show higher levels of concern and lower confidence compared to white adults, with 61% of white adults feeling confident [3] - Women and college graduates also exhibit elevated concerns regarding job security [4] Inflation and Wage Outlook - 75% of Americans report rising prices, with 50% stating that prices are increasing faster than usual [4] - Only 31% of the public anticipates wage increases in the coming year, with just 8% expecting actual increases, marking the lowest outlook since 2021 [5] - The combination of job concerns, rising prices, and stagnant wages contributes to a negative sentiment about the economy, impacting political approval ratings [5] Economic Sentiment and Partisanship - Economic sentiment is more negative among Democrats compared to Republicans, with independents also trending negatively on economic issues [7]