Global Economy Stuck in Price Pressure Quagmire

The global economy continues to face price pressures, according to recent data. The US personal consumption expenditures price index, excluding food and energy, rose in line with expectations in July, but the annual gauge remained stuck at 3.3%. This stagnation is a concern for Federal Reserve Chairman Kevin Warsh, who wants to see underlying inflation clearly heading lower.

Meanwhile, consumer spending stalled, adding to a string of reports suggesting the economy cooled in July after robust spending earlier in the summer. In contrast, Germany's economy showed signs of recovery, with its growth quicker than initially thought in the second quarter.

Inflation accelerated in Spain and France, strengthening the case for an increase in interest rates next month. China's industrial profits continued to slow, pointing to growing pressure on Chinese companies as domestic demand weakens and an earlier surge in oil prices fades.