There appears to be no worries about a slowdown in the ECB. From Bloomberg:
European Central Bank President Jean- Claude Trichet signaled the ECB will raise interest rates in December for the sixth time in a year and left open the possibility of further increases in 2007.
"We will do all that is necessary to ensure price stability" next year, Trichet said at a news conference in Frankfurt. The ECB today left its benchmark lending rate at 3.25 percent. "Strong vigilance remains of the essence," he said, a phrase he has used in the past to signal an increase is imminent.
Yesterday's data appear to justify the ECB's stance. Again from Bloomberg:
European manufacturing expanded for the 16th month in October as exports and lower oil prices fanned economic growth, strengthening the European Central Bank's case for raising interest rates again next month.
Royal Bank of Scotland Plc said today its manufacturing index rose to 57 from 56.6 in September. A reading above 50 indicates expansion. The gauge, compiled by NTC Economics Ltd. from a survey of 3,000 purchasing managers, has been above that level since June 2005. Economists had forecast a gain to 56.8, the median of 38 estimates in a Bloomberg News survey showed.
And German unemployment fell to the lowest level in more than two years in October.
The jobless rate, adjusted for seasonal swings, fell to 10.4 percent, the lowest since March 2004, from 10.6 percent in September, the Nuremberg-based Federal Labor Agency said today. The number of people out of work fell 67,000 to 4.35 million. Economists expected a decline of 23,000, according to the median of 36 forecasts in a Bloomberg News survey.
Meanwhile, Reuters reports that construction activity in Britain expanded in October at its fastest pace in more than two years -- the Chartered Institute for Purchasing and Supply's index for construction rose to 58.1 from 53.6 in September -- although construction orders had fallen 10 percent in the three months to September, according to the Department for Trade and Industry.
And even in the US, inflation concerns returned somewhat yesterday. From Reuters:
U.S. business productivity stalled unexpectedly in the third quarter, government data showed on Thursday, while unit labor costs rose at a pace that may vex the inflation-wary Federal Reserve...
Compensation per hour grew 3.7 percent, almost half the pace in the second quarter, helping trim unit labor cost growth to 3.8 percent in the third quarter.
This was higher than the 3.4 percent gain forecast by Wall Street, but was an improvement on an upwardly revised 5.4 percent reading in the April to July period, in a series watched closely by the U.S. central bank...
Unit labor costs...have grown 5.3 percent since the third quarter in 2005. That was the biggest gain on a quarter from the year-ago quarter since the fourth quarter of 1982, when the increase was 5.8 percent...
The Labor Department said the number of U.S. workers applying for jobless benefits rose 18,000 to 327,000...
The four-week moving average...rose to 311,250 from 305,500 the week before.
Offering better news for the jobs outlook, planned U.S. layoffs fell 31 percent in October from the previous month, with the biggest cuts in the automotive and retail industries...according to Challenger, Gray & Christmas Inc., an employment consulting firm.
In a separate release, Commerce Department data showed that new orders at U.S. factories rose 2.1 percent in September as strength in durable goods, particularly transportation, more than offset weakness in nondurable items.
But October retail sales have disappointed.
U.S. retailers posted disappointing October sales on Thursday, and Wal-Mart Stores Inc. forecast flat November sales at U.S. stores open at least a year, raising fears about the critical holiday shopping season...
... 61 percent of U.S. retailers reported October sales below expectations, according to Retail Metrics.