Is inflation past its peak?

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news there are some indications popping through that inflation pressures might be topping out.</p><p>But first, American <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20221490.pdf" target="_blank"><strong>jobless claims rose</strong></a> last week to a bit more than expected, at +241,000 new claims for the week, to put 1,327,000 on these programs and no longer at a record low level.</p><p>And their <a href="https://www.bls.gov/news.release/ppi.nr0.htm" target="_blank"><strong>producer prices rose</strong></a> more than expected, like yesterday's CPI, but these costs are rising faster than the consumer set. They were up +11.3% in a year, nearly back at the March 2022 +11.6% level again. But just like the CPI, costs other than for energy are rising slower now, up +6.4% and an eight month low.</p><p>And there are indications the American petrol price pressure is past its peak. <a href="https://gasprices.aaa.com/" target="_blank"><strong>Average prices nationwide</strong></a> are down -8.2% over the past month in a consistent declining trend now. If this continues, it will show up in CPI and PPI data quite soon.</p><p>In China's cities, their economic slowdown is <a href="https://www.sixthtone.com/news/1010753/for-chinas-anxious-middle-class%2C-saving-is-the-new-spending" target="_blank"><strong>weighing on households</strong></a>. Middle-class consumers are feeling anxious and making painful cuts to their household budgets. Their savings rate is suddenly rising sharply as spending is curtailed. With tough lockdowns hanging over their heads, most Chinese households who can are choosing to save, and that is making life tough for policymakers trying to restart a very sluggish economy. Helicopter money in these situations is less of an option because such