Chinese consumer prices fall and other economics stories to read this week

Consumer prices in China have fallen significantly, dropping at their sharpest rate in more than 14 years. Producer prices also rose in January.

The Chinese economy has been dealing with deflationary pressures since early 2023. The consumer price index (CPI) fell 0.8% in January compared to a year earlier, following a 0.3% decrease in December, according to National Bureau of Statistics data.

This drop in CPI is China's steepest since September 2009, largely driven by a significant decline in food prices, Reuters reports.

The United States trade deficit shrank by nearly 19% in 2023, despite widening slightly in December.

This represents the sharpest contraction in more than 14 years, driven by falling imports and the rising value of exports. In particular, the US' shift from an oil importer to an oil exporter has helped shrink its current account deficit.

The inflation-adjusted value of petroleum exports jumped 15.9% in December to a record high. Economists predict the US economy will continue to benefit from trade in 2024, although risks remain, including disruption in the Red Sea and Panama Canal, says Reuters.

The country's trade deficit declined 18.7% last year, the largest narrowing since 2009, reaching $773.4 billion. Trade added more than half a percentage point to the economic growth last year, according to data from the Commerce Department.

UK house prices rose at their fastest rate since mid-2022 in January, according to Halifax, one of the country's biggest lenders.

Service activity in Japan grew at its fastest pace since September of last year, driven by strong demand and a weaker yen.

The UK's unemployment rate was much lower than originally thought, according to updated figures from the country's Office for National Statistics.

German exports fell more than had been expected in January, largely as a result of weak global demand. It comes as the country's industrial output continues to fall, with production falling in December 1.6% from November's levels.

However, German inflation did ease in January, slowing to 3.1%, down from 3.8% in December year-on-year.

Reserve Bank of Australia Governor Michele Bullock has warned there's still work to do for the country to reach the midpoint of its inflation target of 2-3%. She stressed the bank has not ruled out a further rise in interest rates.

The French economy is forecast to grow 0.1-0.2% in the first quarter of 2024, the country's central bank has said.

Urban consumer price inflation in Egypt fell more than was expected in January, slowing from 33.7% in December to 29.8%. Inflation had hit a historic high of 38% in September.

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