Core and Services Momentum Inches Lower (2/2)

MNI’s calculations indicate services and core momentum moderated slightly in August: 4.3% 3M/3M annualised for services (down from 4.5% Jul and lowest since Sept 2022), with core steady on a rounded basis (4.1%) but slightly lower unrounded for the lowest since Jan 2022.

• Headline and non-energy industrial goods momentum saw an uptick in August (the latter a 3 month high 3.2% vs 2.7% prior), with the former likely driven by positive base effects arising from France and Germany’s energy prints, and the latter potentially reflecting shifting sales periods.
• On a seasonally adjusted basis per the ECB, Core at 0.3% M/M (0.4% prior) was the slowest in 3 months, as were Services at 0.2% (0.4% prior); industrial goods ex-energy ticked up to a 6-month high 0.4% M/M from 0.3%. But PPI and other leading indicators suggest further weakness is ahead for core goods, with services seen as the key to the future direction of travel for overall core.
• The fall in core and services momentum – albeit smaller than in July – will be seen by the ECB as another step in the direction of returning to target, and one which should become more substantial from next month as base effects, statistical and seasonal quirks fall out of the comparison.
• The full PDF analysis can be found here.
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