Overseas news
US producer prices rose in November amid a surge in the cost of food. The producer price index (PPI) for final demand grew 0.4% in November, higher than the 0.3% increase in October.
However, a moderation in the prices of services offered hope that the inflation rate will continue to trend lower.
The PPI tracks changes in prices that domestic producers receive for their output. It serves as a measure of inflation since producer prices are a significant factor in how much consumers end up paying for goods and services.
Further, initial jobless claims in the US increased by 17,000 to reach 242,000 for the week ended December 7. The jump may be attributed to seasonal volatility and a cooling demand for labor.
Unemployment is used as an indicator of economic health, since there are comparatively more jobs available when the economy is strong.
Meanwhile, the European Central Bank (ECB) cut interest rates for the 4th time this year, lowering the key rate to 3% from 3.25%. The ECB also signaled that it is open to further easing as it moves closer to its inflation goal and the economy remains weak.
The key rate affects many financial matters both directly and indirectly, including loan rates, bond prices, and the stock market. That’s why any changes to it are of concern to investors.
Local developments
Water rates in the National Capital Region are set to increase effective January 1, 2025, after the Metropolitan Waterworks and Sewerage System (MWSS) Regulatory Office approved rate hikes.
MWSS is allowing a P5.95-per-cubic-meter increase for Manila Water Co. and a P7.32-per-cubic-meter hike for Maynilad Water Services. Higher water bills may lead to increased household spending, which could drive up inflation.
Also, the Philippine Stock Exchange index (PSEi) ended down on Thursday at 6,641.35 as investors digested the latest US consumer inflation data and its potential impact on the US Federal Reserve’s (the Fed) policy decision next week.
Investors closely monitor the Fed’s moves since they tend to influence the Bangko Sentral ng Pilipinas’ (BSP) decisions on whether to cut, increase, or keep interest rates steady.
The news shows no clear indication of big changes happening soon. You may want to continue following your strategy for now.
