Mixed economic news

The economic news around the world remains mixed, not least those from the US yesterday.

Inflation concerns were maintained after the Labor Department reported yesterday that the US producer price index increased 0.6 percent in April. This followed a 0.7-percent rise in March and a 0.4-percent gain in February. Excluding food and energy prices, the producer price index for finished goods increased 0.3 percent in April.

Any increase in demand, however, did not show up in the Federal Reserve's release yesterday on industrial production, which fell 0.2 percent in April after an increase of 0.1 percent in March. Output from manufacturing and mining were flat while output from utilities dropped 2.3 percent. Overall capacity utilization fell 0.2 percentage point to 79.2 percent, which is 1.8 percentage points below the 1972-2004 average.

Providing hope for future demand and production is yesterday's Commerce Department report showing that US housing starts surged 11.0 percent in April, reversing a 14.9 percent fall in March.

In earlier news out of Asia (and not previously reported), Japan's industrial output in March fell a revised 0.2 percent from February, better than the initially estimated decline of 0.3 percent, China's retail sales rose 12.2 per cent in April, below the 13.9 per cent rise in March, Singapore's retail sales rose 10.7 percent in March over February while its non-oil domestic exports rose 4.6 per cent in April, reversing the 6.7 per cent fall in March.

In the UK, inflation is holding steady as the consumer price index rose 1.9 per cent in the 12 months to April, the same as in March, and British house prices rose a modest 0.3 percent between mid-April and mid-May, down from 1.3 percent between mid-March and mid-April.

The concern over rising consumer price inflation and falling asset price inflation in the UK and almost everywhere else is just another aspect of the conundrum in the global economy.