Is inflation cooling, or is a recession approaching? An in-depth analysis of recent macroeconomic data 📉🔥

Recently, major central banks around the world have observed that inflation appears to be slowing, but the risk of a recession is looming. This time, I'll use the most extensive and detailed analysis to help you deconstruct the latest macroeconomic data and see the recessionary signals hidden behind the decline in inflation. I'll explain what's going on with the down-to-earth Hong Kong voice! 😎

Economic growth is slowing: In the second quarter of this year, GDP growth in many countries fell from 3.5% at the beginning of the year to around 2.1%, with weak exports and slowing investment being the main reasons. The consumer confidence index also fell from 105 recently to 95, reflecting a cooling of household spending intentions. 🏠🛒

Manufacturing PMI declines: In August, the global manufacturing Purchasing Managers' Index (PMI) generally fell below the 50 boom-bust line. Major manufacturing countries such as Germany, Japan, and South Korea fell from 52 to around 48, indicating that manufacturing activity has shifted from expansion to contraction, factory orders have dropped sharply, and inventories have accumulated. 🏭⚙️

Retail sales index weakened: US retail sales fell 0.3% month-on-month in August, the EU fell 1.1%, and Japan also saw a 0.5% drop, indicating that consumers are beginning to tighten their belts due to high interest rates and inflationary pressures, and sales of services and durable goods have also declined. 🛍️📉

Inflation data has eased: The US core CPI annual rate fell from 6.0% to 4.7% in July, the Eurozone's fell from 5.3% to 4.1%, and Hong Kong's CPI fell from 2.8% to 2.1%, easing inflationary pressures. However, it is worth noting that core commodity prices remain high, and rental and salary costs continue to rise. 💰❄️

The labor market is cooling: The unemployment rate in the United States rose from 3.5% to 3.8%, the unemployment rate in Europe rose from 6.4% to 7.0%, and the unemployment rate in Hong Kong also rose from 3.1% to 3.4%, indicating that labor demand is slowing. Companies are starting to cut back on hiring or even lay off employees, suppressing household income and spending. 👷♀️📉

Credit growth is slowing: The growth rate of global broad money supply (M2) has slowed from 8% at the beginning of the year to 4%. Banks are less willing to lend, corporate financing costs remain high, and financing demand has also weakened. The growth rate of total loan balances in the Hong Kong banking system has slowed from 10% to 5%, increasing financing pressure on small and medium-sized enterprises. 🏦📉

Both consumer and business confidence are declining: the University of Michigan Consumer Confidence Index in the United States rose from 74 to around 60, while the Credit Suisse Business Confidence Survey in Switzerland also fell below 50. This sharp drop in confidence means that future consumption and investment may further decline, forming a negative cycle. 🤔🔄

Editor's View: Cooling inflation does not necessarily mean a healthy economic recovery. On the contrary, several leading indicators suggest that the global economy is entering a period of "stagflation"—slowing growth coupled with continued high costs is causing both businesses and consumers to hold back.
Hong Kong editor recommends:

1. Financial management should be conservative : Although deposit returns have increased slightly in a high-interest environment, actual purchasing power is still eroded by price pressures. It is advisable to maintain liquidity and diversify investments.

2. Workplace and skills investment : The unemployment rate may continue to rise. It is recommended to strengthen digital skills, language skills and industry diversity to enhance resilience.

3. Consumption shift : Shift towards cost-effective necessities and services, reduce luxury spending, and make warehouse purchases at low prices rather than frequent small purchases.

4. Capture emerging fields : Industries such as AI, green technology, and healthcare still have structural growth potential, so you can pay attention to related funds or leading companies.

Conclusion: In the short term, while inflation will decline, this will be accompanied by slower economic growth, declining employment and confidence. The global economy is more likely to enter an "atypical recession"—no major financial crisis, but insufficient growth momentum. Hong Kongers must take precautions to find a way to survive amidst the turmoil! 💡🌏📊