Mixed news

The economic news yesterday was mixed, with oil a recurring theme.

In the US, this can be seen from the Reuters reports on the Labor Department's CPI data:

The Consumer Price Index, the most widely used gauge of inflation pressures, climbed 0.5 percent last month after an unchanged reading in June. It was the biggest monthly rise in consumer prices since a matching 0.5 percent jump in April. But so-called core inflation, which strips out volatile food and energy items, inched up just 0.1 percent for a third straight month -- less than the 0.2 percent climb economists had anticipated.

Despite a slowdown in July, housing activity also looks robust, according to another Reuters report, this time on the Commerce Department's residential construction data:

U.S. housing starts edged down 0.1 percent in July but exceeded Wall Street forecasts as groundbreaking for single-family homes marched higher, a Commerce Department report showed on Tuesday. July housing starts came in at a 2.042 million unit annual rate, down from June, which saw starts revised up to a 2.045 million unit pace from an originally reported 2.004 million unit rate...

Permits for future groundbreaking, an indicator of builder confidence, also exceeded economists' expectations, rising 1.6 percent to a 2.167 million unit pace -- a high not seen in more than 32 years. Economists had forecast permits to decline to a 2.105 million unit pace in July from a revised 2.132 million unit pace in June.

Meanwhile, from the Federal Reserve's industrial production report:

Industrial production increased 0.1 percent in July after a gain of 0.8 percent in June. Manufacturing output increased 0.1 percent in July; excluding motor vehicles and parts, manufacturing production rose 0.4 percent. The output at utilities rose 0.7 percent, and production at mines declined 1.3 percent.

At 119.4 percent of its 1997 average, industrial production in July was 3.0 percent above its year-earlier level. In July, capacity utilization for total industry declined 0.1 percentage point, to 79.7 percent, a rate 1.3 percentage points below its 1972-2004 average.

The weaker mining output, though, was attributed to hurricane-related shutdowns of oil and gas platforms in the Gulf of Mexico.

Oil is also a factor in a reported weaker sales outlook from Wal-Mart:

Retail heavyweight Wal-Mart Stores Inc. on Tuesday warned of a weaker third quarter as steep oil prices hurt consumer spending, casting a pall over the entire sector and sending retail shares plummeting.

There was similarly mixed news from the UK. Inflation in July hit the highest level since 1997:

Soaring petrol prices pushed inflation above its target in July to the highest level since comparable records began in 1997, dousing expectations of further interest rate cuts. The Office for National Statistics said the consumer price index rose 0.1 percent on the month, taking the annual rate up to 2.3 percent from 2.0 percent in June.

...even as house prices declined:

House prices fell at their slowest pace in five months in July as the prospect of lower interest rates lifted confidence, a survey showed on Tuesday. The Royal Institution of Chartered Surveyors said its seasonally adjusted house prices balance for the three months to July rose to -36 from an upwardly revised -41 in the three months to June.

...and the Conference Board's leading index for the UK decreased 0.4 percent to 132.4.

There was some better news from Japan as the government revised its index of leading economic indicators for June upwards to 63.6 percent from the preliminary 60.0 percent.

In China, there was another sign of a slowdown.

Chinese fixed-asset investment grew at a faster-than-expected annual pace in July but still fell from the previous month, reflecting the impact of government curbs and shrinking corporate profit margins. July's fixed-asset investment was 27.7 percent higher than a year earlier, compared with a median forecast of 25.8 percent from six economists polled by Reuters. Fixed-asset investment, which covers spending on things such as roads, power plants and apartment buildings, was up an annual 28.8 percent in June and 28.2 percent in May.

Of course, for China, a slowdown in fixed-asset investment is considered good news.