Yesterday's economic data from the US probably did not change many people's views on the outlook. Reuters reports:
The Labor Department said overall U.S. consumer prices dropped 0.5 percent in September after rising 0.2 percent in August. But core prices, which exclude food and energy, crept up 0.2 percent for a third successive month, enough to keep inflation risk at the forefront as a potential worry...
Separately, the Commerce Department said housing starts hit an annual pace of 1.772 million units in September, compared with an upwardly revised 1.674 million pace in August.
The scope for a housing pickup seems limited, however, since permits for future groundbreaking that gauge builders' optimism fell 6.3 percent in September to 1.619 million units a year, the lowest rate since October 2001.
Meanwhile, the release yesterday of the minutes of the recent Bank of England policy meeting momentarily raised expectations for another rate hike soon. Reuters reports:
The Bank of England's two newest policymakers opposed this month's decision to keep interest rates steady...
Both newcomers voted for an immediate increase at the Monetary Policy Committee's October meeting, while most other members also contemplated raising rates but felt they could wait to see how their next quarterly forecasts look in November.
But UK labour data were cooler than expected.
The Office for National Statistics said average earnings rose 4.2 percent in the three months to August, below expectations for a 4.3 percent rise and down from 4.4 percent in the three months to July.
Excluding bonuses, average earnings growth eased to 3.6 percent in the three months to August from 3.7 percent -- the lowest rate since January 2004...
The number of people claiming jobless benefits jumped 10,200 in September, the strongest increase since March and confounding forecasts for an unchanged reading.
That took the overall claimant count level to 962,000 -- the highest since December 2001, but left the unemployment rate unchanged at 3.0 percent.
Central bank minutes were also out in Japan yesterday. From Bloomberg:
The Bank of Japan is monitoring the risk that business investment may overheat, derailing the longest economic expansion since World War II, minutes of its September policy board meeting show.
"A few members commented that they would continue to pay attention to whether there was a possibility of any acceleration of business fixed investment causing large economic swings," according to the minutes of the Sept. 7-8 policy meeting. The board voted unanimously to keep rates unchanged at the meeting, after raising them for the first time in almost six years in July...
Consumer prices will probably stay on a rising trend even after the revision, the board members said at the meeting. They agreed that the change hasn't affected the central bank's view of price stability.
But leading indicators for Japan are not looking very bright. From Kyodo/Yahoo! News:
The index of coincident indicators was raised from a preliminary 77.8 percent to 80.0 percent, but that of leading indicators was cut from a preliminary 20.0 percent to 18.2 percent, the Cabinet Office said...
Real private-sector machinery orders, excluding those from shipbuilders and power utilities due to their volatility, turned out to be "negative" for August, causing the downward revision of the leading indicators, the office said.
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