US data show cooling, Germany too

Yesterday saw more signs of cooling in the US economy and possibly in the German economy as well. But there were upbeat news elsewhere.

Reuters reports the fall in US housing starts:

The Commerce Department said U.S. housing starts fell 6.0 percent in August to an annual pace of 1.665 million units, the lowest since April 2003 and 19.8 percent below the July 2005 pace.

Economists had forecast August housing starts to decline to 1.75 million units from July's originally reported pace of 1.795 million...

Permits for future groundbreaking, an indicator of builder confidence, fell 2.3 percent to a 1.722 million-unit annual pace, the lowest in four years. Economists had expected the Commerce Department to report August permits at a 1.745 million pace.

...and the cooler producer price inflation:

Producer prices edged up a smaller-than-expected 0.1 percent in August and core prices posted a surprise drop of 0.4 percent, the biggest since April 2003.

The Labor Department said the decline in the core producer price index, which strips out volatile food and energy costs, reflected a 2.6 percent drop in auto prices and a 3.4 percent decline in the price of light trucks and SUVs.

The decline in core producer prices followed a 0.3 percent dip in July, marking the first back-to-back monthly declines since November and December 2002.

But retail spending does not seem to be hurting too much.

Indeed, retail industry reports on Tuesday showed U.S. chain store sales rose last week as cooler weather boosted sales of seasonal items. Redbook Research said sales last week were up 4.1 percent from a year ago, following an increase the week before.

Another Reuters story covering another retail report also suggest that retail sales "remained robust".

Sales fell 1.1 percent in the week ended Sept 16, compared with a 0.3 percent drop the previous week, the International Council of Shopping Centers and UBS said in a joint report. The report attributed the decline to observance of the September 11 attacks.

Compared with the same week a year ago, sales rose a strong 4.9 percent following a sharp 3.8 percent year-ago gain the preceding week.

And yet another Reuters report says that holiday sales are expected to hold up.

Total holiday retail sales are expect to rise 5 percent, compared with a 6.1 percent jump during the same season last year, the National Retail Federation forecast.

There were also signs of cooling in Europe. Bloomberg reports cooling in German producer price inflation as well.

Prices for goods from newsprint to plastics rose 5.9 percent from a year earlier, after increasing 6 percent in July, the Federal Statistics Office in Wiesbaden said in a statement today. That matched the median expectation in a Bloomberg News survey of 35 economists. From July, prices advanced 0.2 percent.

... Excluding energy costs, producer-price inflation was 3 percent last month, the statistics office said.

And German investor confidence fell in September:

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations fell to minus 22.2, the lowest since January 1999, from minus 5.6 in August. Economists expected the index to slip to minus 8, the median of 38 estimates in a Bloomberg News survey showed.

But consumer confidence in Italy went in the other direction. Again from Bloomberg:

Italian consumer confidence jumped in September to the highest in four years as falling gasoline prices gave households more money to spend and revised growth forecasts indicated the economic expansion has accelerated.

The Rome-based Isae Institute's index, based on a poll of 2,000 households, rose to 110.1 from a revised 108.1 in August, the biggest increase in seven months. The reading was higher than the 108.3 median forecast of 19 economists surveyed by Bloomberg News.

Also giving a more positive signal is Japanese land prices. AFP/CNA:

Commercial land prices in the Tokyo, Osaka and Nagoya metropolitan areas went up for the first time in 16 years as investment money poured in, the Ministry of Land, Infrastructure and Transport said...

Commercial land prices jumped 3.9 percent year-on-year in the Tokyo area, 3.6 percent in Osaka and 2.4 percent in Nagoya as of July 1, it said...

Residential land prices also showed gains in the survey out Tuesday, at an average of 0.4 percent in the three metropolitan areas but the upbeat tone in the capital was not felt across the nation.