The European Central Bank may well start to look at cutting interest rates as inflation slows convincingly and its focus turns to avoiding a recession, according to Michael Field, European market strategist at Morningstar. Consumer prices rose at their slowest rate in more than two years in November, at 2.4%, with the closely watched core rate also easing, according to confirmatory figures set out Tuesday. "The focus for the ECB will certainly now shift to keeping the eurozone economy alive," Field writes in a note. Gross output contracted in the bloc in the third quarter, and the central bank may now, Field writes, turn to interest-rate cuts sooner rather than later to give the economy a boost. There is no sign inflation is likely to pick up in a major way again soon, he adds.

-Joshua Kirby

Commentary Meet the New Economy, Just Like the Old Economy

Suppose you're an economist who issued a forecast in January 2020 of where the U.S. economy would be in December 2023, then promptly fell into a coma. This month, you woke up and glanced at the latest economic data. You might not suspect we had been through a traumatic pandemic, Greg Ip writes.

Nippon Makes Steely Bet on a U.S. Manufacturing Renaissance

By shelling out so much for U.S. Steel, Nippon Steel is betting the American manufacturing renaissance will succeed , but that still won't stop politicians from taking potshots, Nathaniel Taplin writes.

Basis Points Consumer prices in Canada advanced at a steady pace last month as households continued to feel the pinch of higher costs even as the country's economy has cooled sharply. The consumer-price index rose 3.1% in November from a year earlier, unchanged from October's rise, Statistics Canada said Tuesday. (Dow Jones Newswires) The U.K. economy is "limping with a sprained ankle" into 2024, accountancy firm KPMG says, adding that while economic activity has topped expectations this year, the outlook remains weak and the economy is vulnerable to shocks. Although inflation has peaked, much of the effect from higher interest rates is still to come, KPMG adds. (DJN) Spain's economy is still set to outpace the rest of the developed world this year but growth should be a little below previous expectations in the following years, according to Bank of Spain forecasts. Gross domestic product should expand 2.4% in 2023, the bank estimates, revising its projection a little higher. But growth should slow to 1.6% in 2024, 200 basis points below the Spanish central bank's previous forecasts. (DJN) Consumer confidence in Germany improved for the second-straight month in data for January, as income expectations jumped, despite a still-subdued outlook for the country's economy. Japan's exports fell in November after two months of growth, dragged down by lower shipments of products such as steel and chip-making equipment, data from the Ministry of Finance showed Wednesday. Feedback Loop

This newsletter is compiled by James Christie in San Francisco.

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This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

12-20-23 0716ET