US data mixed but continued monetary tightening likely elsewhere

The economic news from the US yesterday was mixed. Reuters reports on housing:

New single-family home sales increased 5.3 percent to an annualized rate of 1.075 million units in September, the Commerce Department said. It was the second straight monthly gain, but the increase reflected a greater willingness by sellers to slash prices.

The department said the median price for a new home was down 9.7 percent from $240,400 a year earlier, the biggest year-on-year price drop since December 1970...

While the pace of new home sales picked up in September, it was still off 14.2 percent from year-ago levels -- a sign of how far the once high-flying market has fallen.

Still, the supply of homes available for sale at September's sales pace fell to 6.4 months' worth from 6.8 months in August, as the number of homes on the market fell 1.9 percent to 557,000.

...durable goods orders:

The department said orders for durable goods...leaped 7.8 percent in September, the biggest jump since June 2000, on a rush of civilian aircraft orders...

While the overall increase in orders was much greater than economists had expected, orders were up a smaller-than-forecast 0.1 percent when transportation orders were stripped out...

Offering an upbeat sign on capital spending plans, orders for non-defense capital goods excluding aircraft, a proxy for business spending, rose a larger-than-expected 1.1 percent.

...and employment:

A separate report from the Labor Department showed the number of workers applying for jobless benefits rose by 8,000 last week to 308,000, in line with expectations and still pointing to a relatively healthy job market.

The rest of the world's central banks still look more likely to emulate the Riksbank's 25 basis-points increase in interest rates to 2.75 per cent yesterday than the Federal Reserve's decision to hold rates the day before, although the Reserve Bank of New Zealand, after yesterday's decision to hold rates, may not be one of them.

In the UK, the NIESR expects inflation to accelerate. Bloomberg reports:

U.K. inflation will accelerate to the fastest pace in at least nine years this quarter, requiring two interest-rate increases to bring it back down to target, the National Institute for Economic and Social Research said.

The consumer-price index will average 2.6 percent in the fourth quarter, the highest since that measure of inflation was introduced in 1997, the London-based research group said today. Higher prices of household goods and housing costs caused it to raise its forecast from 2.2 percent in July.

Meanwhile, consumer confidence in Germany rose to the highest level in five years. From Bloomberg:

A confidence index compiled by GfK and based on an October survey of about 2,000 people that aims to forecast households' expenditure one month ahead, climbed to 9.2 from a revised 8.9 in the previous month, the Nuremberg-based market research company said today. That's the highest level since November 2001, when the index stood at 9.6...

Gfk's sub-index measuring households' willingness to spend rose to 64.4, the highest since records began in 1980. A gauge of income expectations rose to 0.2 from minus 8.8...

A gauge of consumers' assessment of future economic developments fell to 6.9 from 12.4, today's report showed.