Cost cuts everywhere

January 10, 2019

Interesting times. Now that it’s January 2019, more and more news of challenging market conditions and cost reduction programs make headlines. Despite full employment wherever economists look. The Financial Times reports that Ford cuts costs by 14bn USD globally, with thousands of jobs in Europe alone. Cost cuts are announced throughout all industries, in the financial sector BlackRock has been the latest to announce cost cuts. This comes after the ECB has announced that it observed a moderating momentum about future economic activity, with an decelerated growth in 2019 (ECB, 2018) . As even inflation goes down slightly, we can speculate if it’s either a reduction of cost-push inflation or a reduction of demand-pull inflation. More recent news suggest that consumer demand goes down, hence the demand-based component of inflation seems to become smaller.

References

ECB (2018) ‘Economic and monetary developments dec 2018’. Available at: https://www.ecb.europa.eu/pub/economic-bulletin/html/eb201808.en.html.