US Producer Price Index Rises
The Bureau of Labor Statistics has just released US Producer Price Index figures for March. Month on month this figure is 0.5% up sharply on February’s negative 0.1% and also coming in ahead of consensus estimates of 0.1%. The year on year reading is 1.4% which is also higher than last month’s 0.9% and again beats estimates for 1.0%. The more stable ex Food and Energy version of this data also shows gains, month on month this is up to 0.6% from the last reading of -0.2% and beats the anticipated estimate of 0.2%. The year on year reading is 1.4%, this had been expected to remain consistent with February’s 1.1% reading.
As the world’s Finance Ministers and Central Bankers descend on Washington this weekend for a round of World Bank and International Monetary Fund (IMF) meetings the US can take comfort in the fact that is projected to be the second fastest growing developed economy in the developed world this year. The IMF raised US growth forecasts to 2.8% for 2014 and 3% in 2015, these projections are broadly in line with the US’ own forecasts but as is often the case the IMF figures tend to be on the pessimistic side so the US can most likely look forward to outperforming these predictions.
The IMF also credited the accelerating pace of the US recovery with contributing to a rise in global growth forecasts. The world economy is now predicted to grow at a rate of 3.6% in 2014 and up to 3.9% in 2015. These forecasts have be slightly reduced since the IMF last published global growth predictions three months ago. The slowing in China is no doubt weighing on these world GDP forecasts but the strongly increasing pace of the developed economies, particularly the US and the UK are in no small part compensating for sluggish emerging markets.
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