It looks like China will continue to tighten policy in coming months. AFP/CNA reports the latest inflation and economic data:
China said Friday its robust economy slowed slightly in the first quarter of 2011 but inflation hit a 32-month high, suggesting Beijing's efforts to rein in soaring costs are still falling short.
Gross domestic product in the world's second-largest economy expanded 9.7 percent on year in the first three months of the year, the National Bureau of Statistics said, fuelling market expectations for more tightening measures.
The figure was lower than the 9.8 percent growth rate posted in the final quarter of 2010...
The politically sensitive consumer price index rose 5.4 percent year-on-year in March -- the fastest pace since July 2008 and well above the government's 2011 target of four percent -- and 5.0 percent in the first quarter...
Industrial output from China's millions of factories and workshops rose 14.4 percent year-on-year in the first quarter, while fixed asset investment, a measure of government spending on infrastructure, rose 25 percent.
Retail sales in the first three months of the year were up 16.3 percent.
Europe also saw inflation accelerate in March. Bloomberg reports:
European inflation accelerated more than previously estimated to the fastest in more than two years in March, led by surging energy costs, adding pressure on the European Central Bank to keep raising interest rates.
Inflation in the 17-nation euro region quickened to 2.7 percent from 2.4 percent in February, the European Union’s statistics office in Luxembourg said today. That’s above an initial March estimate of 2.6 percent and the fastest since October 2008. Euro-area exports rose 1.6 percent in February from the previous month, a separate report showed.
The 12-month inflation rate also hit 2.7 percent in the US. MarketWatch reports:
The prices paid by American consumers rose sharply again in March, mainly because of higher gasoline and grocery costs, according to the latest government data.
The consumer price index rose 0.5% last month, the Labor Department reported Friday. The so-called core rate rose a lesser 0.1%.
Economists surveyed by MarketWatch had expected CPI, which tracks inflation at the retail level, to rise by 0.5% overall, or by 0.2% on a core basis...
Consumer prices have climbed 2.7% over the past 12 months, the biggest increase since December 2009. As recently as November the 12-month inflation rate was just 1.1%...
Core consumer prices, meanwhile, have risen at a much slower pace of 1.2% over the past year, but the 12-month rate has doubled since last October.
Inflation has risen as capacity utilisation hit its highest level in almost 3 years in March. From MarketWatch:
U.S. industrial production rose a solid 0.8% in March, with broad-based gains across sectors, the Federal Reserve reported Friday...
Capacity utilization – a gauge of slack in the economy – jumped to 77.4% in March from 76.9% in February. This is the highest level since July 2008 but still below the average rate of 80.4% from 1972 through 2010.
Rising inflation did not prevent consumer confidence from improving in April. MarketWatch reports:
Consumer sentiment rose in April as worries about the impact of surging gasoline prices receded slightly, analysts said Friday.
The Thomson Reuters/University of Michigan survey of U.S. consumers’ sentiment hit 69.6 in its preliminary reading for April, up from 67.5 for March.