Bloomberg reports that US home building is recovering.
Work began on more U.S. houses in April than at any time in over a year and wholesale prices unexpectedly decreased, showing the economy is strengthening without stoking inflation.
Housing starts rose to a 672,000 annual rate last month, exceeding the median forecast of economists surveyed by Bloomberg News and the highest level since October 2008, according to Commerce Department figures today in Washington. Another report showed producer prices dropped 0.1 percent, the second decrease in the past three months.
Or maybe not.
Building permits, which are considered a leading indicator for homebuilding, fell 12 percent to a 606,000 annual rate last month, the report showed. Applications for both single-family and multifamily projects decreased.
The fall in producer prices does suggest subdued inflation pressures in the US. Tuesday's data do not suggest the same benign inflation picture in Europe though. Again from Bloomberg:
European inflation accelerated to a 16-month high and exports jumped the most in more than a year as the economy gathered strength.
Consumer prices in the economy of the 16 nations using the euro rose 1.5 percent in April from a year earlier, compared with a 1.4 percent gain in March, the European Union statistics office in Luxembourg said today. Exports from the euro area rose a seasonally adjusted 7.5 percent in March from February, the biggest increase since January 2008...
Inflation was in line with an initial estimate published on April 30 and the fastest pace since December 2008. Energy prices rose 9.1 percent in April from a year earlier, the statistics office said. In the month, overall consumer prices increased 0.5 percent.
The trade surplus narrowed to 600 million euros ($745 million) in March from 3.4 billion euros the previous month. Imports rose 10.3 percent to 124.2 billion euros.
And in the UK, Reuters reports that inflation has jumped to a 17-month high.
British consumer price inflation unexpectedly jumped to a 17-month high in April, driven by big rises in tax on alcohol and tobacco as well as higher prices for women's clothing and food, data showed on Tuesday...
Annual consumer price inflation rose to 3.7 percent last month, up from 3.4 percent in March, while the longer-running retail price inflation series hit its highest level in more than 18 years, the Office for National Statistics said...
On the month, consumer prices rose by 0.6 percent.
One country that isn't facing inflation pressure is Japan, but deflation there has not been too much of a hindrance to overall economic growth. From Bloomberg on Tuesday:
Japan’s consumer sentiment rose to the highest level since October 2007 as the benefits of an export-fueled recovery continued to spread to households.
The confidence index climbed to 42 last month from 40.9 in March, the Cabinet Office said today in Tokyo. A number below 50 means pessimists outnumber optimists...
A separate report today showed that tertiary demand slid 3 percent in March as companies pared spending on technology and communication services.
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