US industrial production and producer prices rise less than forecast

Tuesday's US economic data were weaker than expected. From Bloomberg:

Industrial production and wholesale prices in the U.S. rose less than forecast in October, giving the Federal Reserve more reason to keep interest rates near a record low for an “extended period.”

Total output rose 0.1 percent, restrained by the first decrease in manufacturing in four months, a report from the Fed showed today in Washington. Prices paid to factories, farmers and other producers rose 0.3 percent after dropping 0.6 percent in September, the Labor Department reported...

Production at factories, mines and utilities was forecast to increase 0.4 percent, according to the median estimate of 75 economists surveyed by Bloomberg News. Projections ranged from a gain of 1.2 percent to a drop of 0.3 percent. The Fed revised September’s gain down to 0.6 percent from a previously reported 0.7 percent increase...

The Labor Department’s report on producer prices was forecast to show a 0.5 percent increase, according to the median estimate of economists surveyed. Wholesale prices were down 1.9 percent from a year earlier.

Costs excluding food and fuel, known as the core index, unexpectedly fell 0.6 percent, the biggest drop since July 2006. Over the past 12 months core costs were up 0.7 percent, the smallest gain since 2004.

Another report today showed homebuilder confidence in November was lower than anticipated as companies fretted over the possible expiration of a government tax credit. The National Association of Home Builders/Wells Fargo sentiment index held at 17 for a second month. A reading below 50 means most respondents view conditions as poor.

Despite the weaker-than-expected producer price inflation in the US in October, other data show that global deflationary pressure has eased. For example, Reuters reports that consumer price inflation accelerated in the UK in October.

The Office for National Statistics said consumer price inflation rose to 1.5 percent year-on-year last month, in line with the consensus forecast, from a five-year low of 1.1 percent in September...

The ONS said October's pick-up was due to the statistical impact of a record fall in fuel prices in October 2008 not being repeated this year.