Tuesday, 18 July 2006

Not all data point to slowdown

While the data reported on Friday pointed to a slowdown in US consumer spending, there are still signs of strong growth elsewhere in the global economy.

In the US itself, industrial production was strong in June, reports Reuters.

Output at U.S. factories, mines and utilities rose by a bigger-than-expected 0.8 percent in June and capacity use also topped expectations, a report showed on Monday in a sign that a hot economy could weigh on an inflation-wary Federal Reserve.

Capacity use rose to 82.4 percent, the highest rate since 82.5 percent in June 2000, the Fed reported on Monday. Analysts were expecting a 0.4 percent gain in industrial production and a capacity use rate of 81.9 percent...

However, an index of manufacturing growth in New York in July fell sharply on declines in new orders and shipments in October. The New York Federal Reserve Bank's Empire State general factory conditions index dropped to 15.64 in July from June's 29.01.

European industrial production was also relatively strong in May, rising 1.6 percent in the euro zone and 1.2 percent in the EU25, or 4.9 percent and 4.7 percent respectively on a year-on-year basis. But the growth is being accompanied by relatively high inflation, euro zone inflation registering 2.5 percent in June and EU25 inflation registering 2.4 percent; both rates were unchanged from May.

Meanwhile, in the UK, house price inflation appears to be unabated. Property website Rightmove reported that asking prices rose 10.6 percent in the period from early June to early July compared with a year earlier or 2.9 percent on the month, while a Royal Institution of Chartered Surveyors survey showed that house prices rose at their fastest pace in more than two years in the three months to June.

1 comment:

Enzio von Pfeil said...

The indicators mentioned tend to be lagging indicators. They reinforce our view that rates have much further to rise in the States and also in Europe

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