US CPI up on energy, jobless claims surge in Katrina's wake

Reuters summarises the economic news from the US.

Gasoline prices that were soaring even before Hurricane Katrina struck pushed U.S. inflation ahead swiftly last month... The Consumer Price Index jumped 0.5 percent in August, but the core index, which strips out volatile food and energy costs, moved up just 0.1 percent, the Labor Department said...

The New York Federal Reserve said its index of New York State factory activity fell to 16.97 from August's 23.04, but it was still stronger than many on Wall Street had expected. However, the Philadelphia Fed's index of mid-Atlantic factory activity plunged to 2.2 in September from August's 17.5...

In a sign of the storm's human toll, first-time claims for state unemployment aid shot up 71,000 last week. It was the biggest jump since blizzards shut down much of the U.S. Eastern seaboard in January 1996. The increase took initial claims up to 398,000 in the week ended September 10, the highest level in two years.

Mark Thoma has more on these, as well as the report on sales and inventories for July, which showed the former rising 1.1 percent and the latter falling 0.5 percent.

For the UK, Edward Hugh points to the disappointing retail sales for August -- which were flat -- and for July -- which were revised down to minus 0.6 percent. However, the Conference Board's leading index for the UK did show a rise of 0.4 percent to 133.1 for the month of July, reversing declines in recent months. The Conference Board's leading index for France had also increased in July -- by 0.5 percent to 106.4.

Edward Hugh also looked at Japan's economy, and is not impressed by it, despite the rise in consumer confidence to 48.4 in August from 48.1 in July. He said that Japan's workforce is in decline and the labour market is tightening, so wages will go up, but demand growth will lag behind wage growth.

The recent news flow on Japan is certainly far from unambiguously strong. Yesterday, the Cabinet Office said that Japan's index of leading economic indicators for July has been revised down to 45.5 from a preliminary 50.0, and is well down from the 63.6 in June.

Certainly, Japan's economic growth is not going to match China's, whose fixed asset investment in August grew 28.5 percent from a year earlier.