CEOs in the US are getting more optimistic. Strong manufacturing activity reported by the Federal Reserve Bank of Philadelphia and a surge in US housing starts in January would seem to justify the optimism, but it is not all good news from the US, as Reuters reports.
Construction of homes in the United States soared in January to the highest in nearly 33 years thanks to mild winter weather, the government said on Thursday in a report showing unexpected strength in housing...
The Commerce Department said housing starts hit a 2.276 million unit annual rate in January, above Wall Street forecasts of a 2.0 million unit pace. December starts were revised up to a 1.988 million unit pace from an originally reported 1.933 million unit rate.
January's 14.5 percent rise was the largest monthly percentage gain since March 1994, when starts rose 17.0 percent...
Permits for future construction, an indicator of builder confidence, posted an unexpected increase, up 6.8 percent to a 2.217 million unit rate from December's 2.075 million pace. Economists had expected a decline to a 2.062 million pace...
A separate report from the Labor Department showed U.S. import prices climbed an unexpectedly steep 1.3 percent in January as the cost of imported petroleum shot up 6.4 percent, its first increase in fourth months.
The rise in import prices, which followed a revised 0.1 percent December drop, outstripped expectations on Wall Street for a 0.9 percent gain. But non-petroleum import prices edged up just 0.2 percent last month.
Export prices rose 0.7 percent, ahead of the 0.2 percent gain economists had expected...
The Labor Department also said the number of Americans filing initial claims for unemployment benefits rose an unexpectedly large 19,000 last week but held below the 300,000 level for a fifth straight week for the first time in over five years, signaling a strong job market.
The department said 297,000 first-time claims for state unemployment aid were filed in the week ended February 11, up from a revised 278,000 in the prior week.
Economists polled by Reuters had expected a rise to 285,000 from the 277,000 originally reported for the prior week.
The increase pushed the four-week moving average of initial claims, which smooths weekly volatility to provide a better sense of job market conditions, up by 6,250 to 283,000.
It may be the weather, or the US housing market may be following the UK's, which seems to be benefiting from a second wind. Reuters reports:
House prices rose in the three months to January for a third straight period although the gains were modest, the Royal Institution of Chartered Surveyors said on Thursday.
The group said its house prices balance edged up to +9 in January from +8 in December. That was the highest since +18 in June 2004 but RICS cautioned rises were now only around half the long-run average pace.
There is not too much enthusiasm among economists for the UK housing market. From another Reuters report:
House prices are overvalued and the recent upturn in housing market activity will likely run out of steam towards the end of the year, a Reuters poll of economists shows...
The median forecast showed house prices, based on the main house price indices, will be 3.5 percent higher in the fourth quarter this year from the same period a year ago. But forecasts ranged widely from no growth to as high as 10 percent.
And UK retail sales seem to have trouble picking up again, based on the data for January.
The Office for National Statistics said [retail] sales volumes fell 1.3 percent on the month -- the biggest decline since December 2004 and sharply lower than forecasts for a 0.2 percent fall. The annual rate of 1.3 percent was the weakest in three months...
Indeed, even heavy discounting by retailers failed to bump up sales volumes last month. The retail sales deflator slipped to -1.2 percent in January from -1.1 percent in December -- suggesting the sharpest price falls in almost a year...
The ONS said the underlying trend rate of retail sales also eased, to 1.3 percent in the three months to January from 1.6 percent in the prior period.
Still, it said the overall trend was "reasonably upward" and had been steadily increasing since mid-2005.
Indeed, analysts expecting interest rates to remain steady or rise this year said January's data could be a mere blip.