More Signs of Inflation Pressures in the U.S.
The PPI rose 1.6% in February, well above the consensus of 0.7%. The bulk of the upside surprise was due to a 3.9% jump in food prices. Notably, the increase in food prices was partly reflected a 48.7% surge in vegetables, which accounts for about 4% of the food index. It should be with little doubt that food prices will continue to increase globally over the next several months.
U.S. Housing Starts Plunge
Housing starts fell 22.5% (month/month) in February to 479k units, well below the consensus of 566k units. The drop was widespread geographically; Midwest (-48.6%), Northeast (-37.5%), West (-28.0%), and the South (-6.3%).
UK inflation Expectations on the Rise
The Q1 Barclays Survey of Inflation Expectations (BASIX) reported another marked rise in general public expectations of inflation. The median expected inflation rate one year ahead rose to 4.2%, from 3.2% in the previous survey; the two-year-ahead expectation rose to 4.5%, from 3.6% in Q4; and the five-year-ahead expectation increased to 4.4%, from 4.0%. All of these are the highest since mid-2008.
India Feeling Inflation
The Reserve Bank of India (RBI) hiked its key policy rates - repo and reverse repo rate - by 25bp each. Bank officials expressed caution and concern. I expect more rate hikes in coming months.
The Swedes are Back to Work
Swedish unemployment rate was 7.9% in February, down from 8.2% in January. The Swedish labor market continues to show strong momentum.
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