Weekly Economic & Financial Commentary

U.S. Review

Weather Effects Continue to Influence Economic Data

Housing starts plunged 16 percent in January to an 880,000-unit pace. Building permit activity also declined for the month but not as sharply.

Inflation indicators continued to reflect subdued price pressures on businesses and consumers. The new producer price final demand index rose a modest 0.2 percent in January while the Consumer Prices Index posted a slight 0.1 percent rise for the month.

The leading economic index rose 0.3 percent in January, indicating continued modest economic activity in the months ahead.

Global Review

Developed Economies & Below Target Inflation

Early in the week, we learned that Japanese GDP growth slowed in the final quarter of 2013. Unlike many of this week’s headlines about the Japanese economy, we do not think the soft print is an indication that Abenomics is failing.

The second half of the week featured consumer inflation data, not only in the United States, but also in Canada and the United Kingdom. In all three economies, the year-over-year CPI inflation rate is below the targets of the various central banks. We discuss what below-target inflation means for monetary policy in this week’s global review.

Read the full report: Economic Research

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