U.S Economy regaining momentum
A series of reports yesterday implied the U.S. economy was regaining its vigor at the beginning of 2007 without generating a spike in inflation. Not only was there an unexpected pickup in new-home building in December but the pace of January business activity in the Philadelphia area also picked up and new claims for unemployment pay dropped to an 11-month low last week.
Nonetheless, the Labor Department said core consumer prices, which exclude food and energy costs, rose by a relatively tame 0.2 percent in December after being flat in November. The overall Consumer Price Index was up 0.5 percent after also being unchanged in the prior month.
An index prepared by the Philadelphia regional Federal Reserve bank showed business activity at its highest level since August, when concern about a slowdown was growing.
Markets are likely to see this as another sign that the economy is growing at a better-than-expected pace and will continue to dim the prospects of an easing by the Fed, at least in the near-term
Federal Reserve officials yesterday underscored concerns about nagging upside risks to inflation, especially given a wave of strong data including signs that a housing slowdown may be moderating. Fed Governor Susan Bies and Cleveland Fed President Sandra Pianalto, who is not a voting member of the policy setting Federal Open Market Committee in 2007, delivered a similar upbeat message in comments on Thursday.
Fed Chairman Ben Bernanke also spoke, but he steered clear of the interest rate debate in an appearance on Capitol Hill, instead warning lawmakers of the long-term dangers posed by fiscal deficits.
The FOMC next meets on Jan. 30-31 and policy-makers are widely expected to hold the key fed funds rate steady at 5.25 percent. The rate has been on hold now for four straight meetings.
Today sees the release of UK Retail Sales for December. Retailers have reported mixed fortunes over the Christmas season but any sign of strength in the data will only fuel fears that another interest rate rise looms. Analysts expect sales to rise 0.5 percent on the month and 3.2 percent on a year ago, suggesting consumer spending has held up in the wake of rising borrowing costs and after some initial predictions of a dismal festive season.
However, with financial markets jittery following last week's shock rate hike to 5.25 percent, any surprise in the retail sales data is likely to inspire a strong market reaction.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Nonetheless, the Labor Department said core consumer prices, which exclude food and energy costs, rose by a relatively tame 0.2 percent in December after being flat in November. The overall Consumer Price Index was up 0.5 percent after also being unchanged in the prior month.
An index prepared by the Philadelphia regional Federal Reserve bank showed business activity at its highest level since August, when concern about a slowdown was growing.
Markets are likely to see this as another sign that the economy is growing at a better-than-expected pace and will continue to dim the prospects of an easing by the Fed, at least in the near-term
Federal Reserve officials yesterday underscored concerns about nagging upside risks to inflation, especially given a wave of strong data including signs that a housing slowdown may be moderating. Fed Governor Susan Bies and Cleveland Fed President Sandra Pianalto, who is not a voting member of the policy setting Federal Open Market Committee in 2007, delivered a similar upbeat message in comments on Thursday.
Fed Chairman Ben Bernanke also spoke, but he steered clear of the interest rate debate in an appearance on Capitol Hill, instead warning lawmakers of the long-term dangers posed by fiscal deficits.
The FOMC next meets on Jan. 30-31 and policy-makers are widely expected to hold the key fed funds rate steady at 5.25 percent. The rate has been on hold now for four straight meetings.
Today sees the release of UK Retail Sales for December. Retailers have reported mixed fortunes over the Christmas season but any sign of strength in the data will only fuel fears that another interest rate rise looms. Analysts expect sales to rise 0.5 percent on the month and 3.2 percent on a year ago, suggesting consumer spending has held up in the wake of rising borrowing costs and after some initial predictions of a dismal festive season.
However, with financial markets jittery following last week's shock rate hike to 5.25 percent, any surprise in the retail sales data is likely to inspire a strong market reaction.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
posted by Drs Search @ 3:41 PM
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