Espresso Nov.20
No fuel for inflation: America’s economy
Brace yourself for more hand-wringing over deflation. Economists think American consumer prices, which the government reports today, fell by 0.1% in October, thanks to cheaper petrol. The annual inflation rate should fall to 1.6% from 1.7%. Core prices (excluding food and energy) probably rose slightly: the numbers imply an annual rate of around 1.5% using the Federal Reserve’s preferred index. That’s too low: the Fed’s target is 2%. Inflation may remain under pressure, because petrol prices have fallen in November too. Depressed expectations of inflation can be a drag on the economy, which is why the Fed wants a rate nearer to its target. For now, it is more concerned about disappearing slack in the labour market. But if inflation expectations slip further, it may consider keeping interest rates at zero beyond mid-2015.
Mexico: tragedy, scandal and protest
On this date in 1910, the Mexican revolution began. In 2014 too, today will be a day of political revolt. Parents of the 43 students presumed murdered in south-western Mexico in late September have called a march in the capital. Universities around the country will close. Mexico City’s airport may be paralysed. Firebombing and vandalism have marred such protests recently, though most people gather peacefully. On Tuesday the president, Enrique Peña Nieto, angrily accused radicals of using the tragedy to destabilise the country. But his standing has also been weakened by scandal: his wife’s opulent home is owned by a businessman who has bid for government contracts. She has sought to defuse the issue by promising to dispose of her right to buy the house (Mr Peña himself hasn’t referred publicly to this potential conflict of interest). The first lady’s residence will be a further cause of anger.
An abomination on trial: FGM in Egypt
The verdict is due today in the trial in Egypt of a doctor charged with the genital mutilation of a 13-year-old girl, Suheir el-Batea, who subsequently died from an allergic reaction to the post-surgical penicillin. This is the first case to come to court since Egypt criminalised female genital mutilation in 2008. The procedure usually involves the removal of the clitoris and labia minora, and can affect menstruation, sex and childbirth. The UN estimates that 91% of Egyptian girls undergo FGM, usually between the ages of nine and 12 and often, as in this case, at their families’ request. In countries where FGM is common, mainly in Africa, both Christians and Muslims believe it ensures a girl’s moral propriety and cleanliness. NGOs are hoping for a conviction, which entails a maximum sentence of two years in jail and a $700 fine. However, some Egyptians worry that outcome would push FGM underground.
