Weather turns cold but not economies

A blast of polar air may be coming down the United States but the economies of the rest of the world show few signs of cooling.

The German economy approached the end of 2006 on a reasonably strong note. From Bloomberg:

[Industrial production] rose 1.8 percent from October, when it fell 0.8 percent, the Economy and Technology Ministry said today in Berlin. The seasonally adjusted trade surplus rose to 19.3 billion euros ($25.2 billion) from 17.3 billion euros in October, the Federal Statistics Office in Wiesbaden said...

Economists expected industrial production to rise 1 percent, according to the median of 37 estimates in a Bloomberg News survey. Exports had a smaller-than-expected drop in November, declining 0.5 percent from the previous month...

"The figures bode really well for the German economy going into this year," said Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland in London. "The only thing we see is that the German economy remains somewhat split, the corporate and industrial side are powering ahead, while German consumers still fret about their incomes and won't spend."

But consumer spending did not turn out too badly in the UK in December. The British Retail Consortium reports that UK retail sales were up 2.5 percent on a like-for-like basis compared with December 2005. The three-month trend rate of growth was unchanged from November at 1.9 percent for like-for-like sales but slowed to 4.0 percent from 4.3 percent for total sales.

And while Australian retail sales slowed in November, the latest consumer confidence survey from Westpac released today showed that consumer confidence has jumped to a 17-month high in January. And in another piece of news released today, Australia reported a narrower trade deficit as exports rose one percent and imports fell three percent.

Meanwhile, tortillas are frustrating hopes for a rate cut in Mexico. Bloomberg reports:

Mexico's annual inflation exceeded the central bank's target range in 2006 as a surge in prices for fresh food retreated more slowly than expected in December.

Consumer prices rose 4.05 percent in the 12 months through December after rising 3.33 percent in 2005, the central bank said on its Web site.

Previously expected rate cuts in the first quarter of 2007 are no longer likely, said analysts such as Gray Newman, chief Latin America economist with Morgan Stanley...

Core inflation, which excludes fresh food and energy, was 0.43 percent in December, the [central] bank said...

The rising price of tortillas, spurred by global demand for corn, is sustaining core inflation, [Barclays Capital's chief economist for Latin America Michael] Hood said.