The theme of weaker growth, higher inflation continues to play out in the US economic data. Bloomberg reports the latest data.
U.S. consumer confidence fell to the lowest level in five years and wholesale inflation picked up, limiting the Federal Reserve's room to maneuver as it tries to avert a recession.
The Conference Board's index of confidence dropped to 75.0 in February, lower than forecast, from 87.3 in January, the New York-based group said today. The Labor Department reported that producer prices rose 1 percent last month. Excluding food and energy, expenses climbed 0.4 percent, the most in almost a year...
Over the past 12 months, producer prices rose 7.4 percent, the most since October 1981. Wholesale prices excluding food and energy advanced 2.3 percent in the year through January.
However, higher inflation hasn't generally extended to asset prices recently.
Home prices in 20 U.S. cities fell in December by the most on record, a separate report showed today. The S&P/Case-Shiller home-price index dropped 9.1 percent from a year ago, after a 7.7 percent decrease in November. Home Depot Inc., the world's largest home-improvement retailer, today said fourth-quarter profit fell and forecast earnings below analysts' estimates.
Fed officials continue to focus on weaker growth rather than on inflation
... Fed Vice Chairman Donald Kohn, speaking today ahead of Chairman Ben S. Bernanke's Congressional testimony tomorrow, signaled the central banker is willing to keep interest rates low to revive the economy...
"I do not expect the recent elevated inflation rates to persist," Kohn said in the text of a speech to the University of North Carolina, Wilmington. "The adverse dynamics of the financial markets and the economy have presented the greater threat to economic welfare in the United States."
Growth is also slowing in Germany, with household spending falling 0.8 percent in the fourth quarter and dragging overall GDP growth down to just 0.3 percent compared with 0.7 percent in the previous quarter. However, business sentiment unexpectedly rose in February, reports Bloomberg.
German business confidence unexpectedly rose for a second month in February, strengthening the case for the European Central Bank to leave interest rates at a six-year high.
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 104.1 from 103.4 in January. Economists forecast a drop to 102.9, according to the median of 45 estimates in a Bloomberg News survey.
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