More mixed reports on inflation as well as on growth outlook

March inflation patterns in the US reported on Wednesday were somewhat replicated in Europe, as Eurostat reported yesterday.

Euro-zone annual inflation was 2.2% in March 2006, down from 2.3% in February. A year earlier the rate was 2.1%. Monthly inflation was 0.6% in March 2006. EU25 annual inflation was 2.1% in March 2006, down from 2.2% in February. A year earlier the rate was 2.1%. Monthly inflation was 0.5% in March 2006. EICP annual inflation was 2.1% in March 2006.

But euro-zone prices excluding energy, food, alcohol and tobacco were up 0.7 percent month-on-month and 1.3 percent year-on-year, up from 1.2 percent in the previous two months.

The UK also saw the annual rate of inflation slow in March to 1.8 percent from 2.0 percent in February, reports Reuters. Furthermore, core inflation -- excluding food, energy, alcohol and tobacco -- also eased to 1.3 percent in March from 1.4 percent.

In the US, yesterday saw more indications of an economic slowdown, but not all data pointed down. Reuters reports:

The Philadelphia Federal Reserve Bank said its business activity index inched up to 13.2 in April from 12.3 in March, a touch below Wall Street estimates of 14.0, while surging commodities prices pushed inflation readings higher.

New orders dropped sharply in April, as did inventories, suggesting manufacturers will need to rebuild stocks in coming months.

Separately, the Conference Board said its index of leading economic indicators, which is aimed at forecasting future economic activity, fell 0.1 percent last month after a downwardly revised 0.5 percent decrease in February...

First-time claims for state unemployment benefits shrank to 303,000 in the week ended April 15 from 313,000 the previous week...

The Philadelphia Fed survey also pointed to solid job growth, with its employment index reaching the highest level since September 2004. Analysts said that could point to a rare monthly gain in factory jobs in the April payrolls report.