US Inflation Remains Over 2%, German GDP Up 0.2%, UK Rates Unchanged, more…


Market Watch: U.S. consumer prices rebound in April

  • The consumer price index rose a seasonally adjusted 0.2% in April because of higher energy costs, the Labor Department said Friday. This followed a 0.3% drop in the prior month.
  • Energy prices jumped 1.1% in April—the biggest increase since January—and were up 9.3% over the past year. Food prices rose 0.2% in April on higher prices for fresh vegetables compared to a 0.3% increase in March.
  • The core CPI, which excludes volatile food and energy costs, rose a slight 0.1%, reversing a 0.1% decline in March.
  • Consumer prices have risen an unadjusted 2.2% over the past 12 months, down from a 2.4% gain in March and a 2.7% rate in February, which was the highest since February 2012.

Bloomberg: Faster German Growth Buoys Draghi’s Firming Euro-Area Pickup

  • German economic growth accelerated to the fastest pace in a year last quarter, underpinning assessments by Mario Draghi and the European Commission that the region’s recovery is getting stronger.
  • The 0.6 percent expansion, up from 0.4 percent in the previous three months, was helped by a surge in investment, a slight increase in consumer spending and a pickup in exports.
  • Germany’s role as driver of economic growth in the 19-nation euro area was confirmed once again as some European Central Bank officials start to debate an eventual exit from stimulus. ECB President Draghi said on Wednesday that the region’s recovery has evolved into a “firming, broad-based upswing.”

Market Watch: Retail sales strengthened in April, brightening economic outlook

  • Sales at U.S. retailers rose in April, and March sales were stronger than originally estimated, painting a stronger picture of American consumers than previously reported.
  • Retail sales increased 0.4%, the Commerce Department said Friday, and were 4.5% higher compared to a year ago. A 0.2% monthly decline for March was revised up to show a 0.1% increase.

Market Watch: U.S. producer prices jump 0.5% in April

  • U.S. producer prices showed a broad-based gain in April, which pushed the annual increase up to the largest advance in five years, government data showed.
  • The Labor Department said on Thursday its producer-price index for final demand rose 0.5% last month.
  • “While rising wholesale costs don’t necessarily translate into higher consumer prices, the jump in producer expenses is a sign inflation pressures are building,” said Joel Naroff, president of Naroff Economic Advisors.
  • PPI’s April gain was the largest since January and followed a 0.1% decline in March. With last month’s jump in prices, the PPI shot up 2.5% in the 12 months through April. That was the biggest gain since February 2012 and followed a 2.3% rise in March.

Zero Hedge: BOE Keeps Rate At 0.25%, Warns Rates May Rise Faster In Case Of “Smooth” Brexit

  • Just as consensus had expected, the BOE kept its interest rate at 0.25% after a 7-1 vote; in a unaimous vote it also kept its corporate and government bond purchase programs unchanged at GBP10 and GBP435 BN respectively.
  • The biggest highlight in the statement was the BOE’s note that monetary policy may need to be tightened “by a somewhat greater extent over the forecast period than the very gently rising path implied by the market curve underlying the May projections” adding that the rate outlook depends on economy performing as expected, and also on Brexit taking place “smoothly.”

IBT: UK manufacturing sector suffers unexpected slowdown in March

  • Britain’s industrial sector slowed down for the third consecutive month, after output suffered an unexpected slowdown in March, official data released on Thursday (11 May) showed.
  • According to the Office for National Statistics (ONS), manufacturing production fell 0.6% in March from the month before, compared with a 0.1% decline recorded in the previous month and analysts’ expectations for a 0.2% drop.
  • On a year-on-year basis, production rose 2.3 %, falling short of forecast for a 3% gain and from the previous month’s revised 3% reading.

Reuters: Brazil retail sales fall in March at fastest rate in 14 years

  • Retail sales in Brazil unexpectedly fell in March at the steepest monthly rate in 14 years, strengthening bets on a bolder interest rate cut at the end of this month.
  • Sales volumes excluding cars and building materials fell 1.9 percent in March from February, government statistics agency IBGE said on Thursday
  • Sales fell 4.0 percent from the year-earlier period, worse than expectations for a drop of 1.8 percent. Consumption has slumped as a record 14 million Brazilians
    were unemployed after the country’s worst recession ever.

This last headline is one I would encourage people to pay attention to. The Independent’s report on declining UK industrial output has been directly associated as a symptom of Brexit. Closer examination of economic data shows that productivity across the world is stagnating.

In the left leaning press at least, Brexit is clearly going to be used as a scapegoat for economic decline. In reality, there is a greater trend in play that goes beyond UK shores.

Independent: Brexit latest – UK industrial output shrinks for a third month in a row

  • British industrial output shrank for a third month in a row in March, official data showed on Thursday, underscoring how the impact of last year’s Brexit vote has begun to weigh on the economy.

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