Friday February 17 2017
Singapore GDP Growth Revised Up To 2.9% In Q4
Statistics Singapore l Joana Taborda | joana.taborda@tradingeconomics.com

The Singaporean economy expanded 2.9 percent year-on-year in the last three months of 2016, higher than 1.2 percent in the previous period and above initial estimates of a 1.8 percent growth. It is the highest expansion since the fourth quarter of 2014, mainly boosted by manufacturing, final figures showed.

Year-on-year, the manufacturing sector grew 11.5 percent, higher than 1.8 percent in the previous quarter and above initial estimates of 6.5 percent. Electronics and biomedical sectors drove the expansion, namely semiconductors, pharmaceuticals and medical technology. The services producing industries advanced 1 percent, compared to a 0.4 percent growth in the September quarter and initial estimates of 0.6 percent. Contributions came from wholesale and retail trade, transportation and storage, accomodation, finance and insurance and other services.
 
In contrast, the construction sector contracted by 2.8 percent, extending the 2.2 percent decline in the third quarter, and in line with earlier figures due to a sharper drop in private sector construction activities.
 
On a quarterly basis, the GDP advanced an annualized 12.3 percent, recovering from a 0.4 percent contraction in the previous quarter and above earlier estimates of 9.1 percent. It is the strongest growth rate since the first quarter of 2011, mainly due to a rebound in manufacturing (+39.8 percent from -5 percent in Q3).
 
For the whole of 2016, the economy advanced 2 percent, above 1.9 percent in 2015 and higher than 1.8 percent initially estimated. For 2017, the GDP is expected to expand between 1 to 3 percent.




Thursday February 16 2017
US Housing Starts Decline 2.6% In January
U.S. Census Bureau | Joana Taborda | joana.taborda@tradingeconomics.com

Housing starts in the United States went down 2.6 percent from the previous month to a seasonally adjusted annualized rate of 1246 thousand in January of 2017, following an upwardly revised 1279 thousand in the previous month and due to a fall in the multi-family segment. Figures beat market expectations of 1222 thousand. Building permits rose 4.6 percent to a one-year high of 1285 thousand, also better than forecasts of 1230 thousand.

The volatile multi-family segment declined 7.9 percent to 421 thousand while single-family housing starts, the largest segment of the market, rose 1.9 percent to 823 thousand. Starts declined in the Midwest (-17.9 percent to 188 thousamd) and the West (-41.3 percent to 225 thousand) but went up in the Northeast (55.4 percent to 143 tousand) and the South (20 percent to 690 thousand).

Building permits reached the highest since November of 2015. Figures for the previous month were revised up to 1228 thousand. Permits for the multi-family segment jumped 23.5 percent to 446 thousand, offsetting a 2.7 percent fall in the single-family segment (to 808 thousand) and a 16.2 percent drop in structures with 2 to 4 units (to 31 thousand). Permits rose in the Northeast (29.6 percent to 149 thousand), the South (9.9 percent to 642 thousand) and the Midwest (5.3 percent to 198 thousand) but fell 13.2 percent in the West (to 296 thousand). 

Year-on-year, housing starts rose 10.5 percent and building permits went up 8.2 percent. 





Thursday February 16 2017
US Jobless Claims Rise Less Than Expected
DOL | Joana Ferreira | joana.ferreira@tradingeconomics.com

The number of Americans filing for unemployment benefits increased by 5 thousand to 239 thousand in the week ended February 11th 2017, from the previous week's unrevised level of 234 thousand and below market expectations of 245 thousand.

Claims have now been below 300,000, the level associated with a healthy labor market, for 102 consecutive weeks. It was the longest stretch since 1970.

The 4-week moving average was 245,250, an increase of 500 from the previous week's revised average. The previous week's average was revised up by 500 from 244,250 to 244,750. 

The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending February 4, unchanged from the previous week's unrevised rate. 

The continuing claims drawn by workers for more than a week (the advance number for seasonally adjusted insured unemployment) during the week ending February 4 was 2,076,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up 1,000 from 2,078,000 to 2,079,000. The 4-week moving average was 2,080,250, an increase of 4,250 from the previous week's revised average. The previous week's average was revised up by 250 from 2,075,750 to 2,076,000.





Thursday February 16 2017
ECB Simulus Still Needed To Support Growth And Inflation
ECB | Joana Ferreira | joana.ferreira@tradingeconomics.com

The ECB's board agreed that the recent trends of a firming economic recovery largely benefited from the current accommodative monetary policy stance and that the central bank’s stimulus was still needed to support growth and inflation, minutes from the ECB's January meeting showed. Policymakers also reiterated that the balance of risks to the economic outlook was seen as remaining on the downside and more decisive contributions from other policy areas were essential to ensure a self-sustaining recovery.

Excerpts from the Account of the monetary policy meeting of the Governing Council of the European Central Bank, held in Frankfurt am Main on Wednesday and Thursday, 18-19 January 2017:

With regard to the monetary policy stance, members widely shared the assessment provided by Mr Praet in his introduction that, while inflation had increased lately, largely owing to base effects in energy prices, underlying inflation pressures had remained subdued and signs of a convincing upward trend were still lacking. It was broadly agreed that a very substantial degree of monetary accommodation continued to be needed for euro area inflation pressures to build up and to secure a sustained return of inflation rates towards levels below, but close to, 2% over the medium term.

Members agreed on the appropriateness of the current monetary policy stance and recent developments were generally seen to vindicate the decisions taken by the Governing Council at its meeting in early December 2016. While there had been some positive news since that meeting, the fundamental picture remained largely unaltered and there was no room for complacency, as risks and uncertainties had not receded substantially, notably those related to the political environment at the global level and within the euro area. 

In this context, it was recalled that, in line with the Governing Council’s monetary policy strategy and past communication, monetary policy had to be forward-looking and oriented to the medium term, meaning that the Governing Council would look through the volatility in short-term data if judged transient and to have no implication for the medium-term outlook for price stability. Therefore, there was broad agreement to look through recent upturns in headline inflation driven by energy prices, while carefully monitoring potential indirect and second-round effects. This was seen to be fully consistent with the Governing Council’s past decisions and established approach to treating temporary changes in inflation on the upside and on the downside.

Against this background, it was widely agreed that it was imperative to maintain a very substantial degree of monetary accommodation for inflation pressures to build up and durably support headline inflation. Otherwise, recent encouraging developments in inflation expectations and the prospects for a sustained adjustment in inflation towards the Governing Council’s inflation aim could be put at risk. Therefore, the Governing Council was seen as well advised to remain patient and maintain a “steady hand” to provide stability and predictability in an environment that was still characterised by a high level of uncertainty. At the same time, the point was made that the window of opportunity provided by a prolonged period of favourable monetary and financial conditions needed to be used by other policy areas to bolster sustained growth, namely by speeding up structural reforms.




Thursday February 16 2017
Indonesia Holds Key Policy Rate At 4.75%
Bank Indonesia Chusnul Ch Manan| chusnul@tradingeconomics.com

Indonesia's central bank kept its benchmark interest rate on hold at 4.75 percent at its February 16th meeting, as expected. Policymakers said the decision was in line with efforts to supports economic growth. Bank Indonesia also left its overnight deposit facility rate and lending facility rate unchanged at 4.0 percent and 5.5 percent respectively.

 
Excerpts from Bank Indonesia Press Release: 
 
The decision is consistent with Bank Indonesia’s efforts to maintain macroeconomic and financial system stability, while preserving domestic economic recovery momentum. Congruent with the global economic improvements, stronger economic growth in Indonesia is expected, with maintained macroeconomic and financial system stability at home. Nevertheless, Bank Indonesia shall remain vigilant of global risks in the form of US policy direction and geopolitical risks in Europe, as well as domestic risks linked to the impact of administered prices (AP) on inflation. To that end, Bank Indonesia will constantly seek to optimise its monetary, macroprudential and payment system policy mix in order to maintain macroeconomic and financial system stability. Furthermore, Bank Indonesia will also strengthen policy coordination with the Government, focusing on controlling inflation within the target corridor as well as ongoing structural reforms to support sustainable economic expansion.

Bank Indonesia projects economic growth in 2017 at 5.0-5.4% (yoy), on the back of strong private consumption, increase in government consumption, and improvements in both private and government investments. Export growth is expected to increase, coupled with increasing imports due to domestic demand.

After suffering in the fourth quarter of 2016, the rupiah relatively stabilized with a tendency to strenghten amid uncertainty regarding policy direction in the United States. In the fourth quarter of 2016, point-to-point, the rupiah depreciated 3.13% (ptp) to a level of Rp13,473 per USD. Bank Indonesia will continue to monitor global financial uncertainty, while instituting measures to stabilise the rupiah in line with the currency’s fundamental value and maintaining market mechanisms.

Inflation remained under control, despite the slight bump recorded at the beginning of 2017. Administered prices (AP) and core inflation pushed CPI inflation to 0.97% (mtm) in January 2017, accelerating from 0.42% (mtm) the month earlier. Meanwhile, inflationary pressures on volatile foods (VF) were controlled and low, along with various food price corrections. The government raised administered prices (AP) through higher administration price to extend vehicle registrations as well as more expensive electricity rates and special fuel prices. Core inflation was controlled at 0.56% (mtm) or 3.35% (yoy) despite a moderate increase. Bank Indonesia will continue to strenghten coordination with the government to control inflation, specifically in the face of several risks stemming from administered prices, as the government reforms energy subsidies, as well as the risk of rising volatile food prices. With these steps, Bank Indonesia predicts inflation within the target corridor for 2017, namely 4±1%.
 
 
 




Thursday February 16 2017
Italy Trade Surplus Widens In December
Istat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Italy's trade surplus rose to €5.80 billion in December 2016 from €5.59 billion in the same month of the previous year and better than market expectations of €4.0 billion. Exports increased by 5.7 percent to €36.2 billion, led by higher purchases of coke and refined petroleum products and vehicles; while imports grew by 6.1 percent to €30.4 billion, as purchases of vehicles and machinery and equipment rose the most.

Year-on-year, exports rose 5.7 percent to €36.21 billion from €34.26 billion, boosted by higher sales of: Coke and refined petroleum products (21.8 percent); vehicles (21.3 percent); sport goods, games, musical instruments and other products (12.3 percent); substances and chemicals (11 percent); and base metals (9.7 percent). By contrast, exports fell for transport equipment (-17 percent). By main industrial groups, sales rose for: Energy (24.5 percent); intermediate goods (6.5 percent); capital goods (4.8 percent); and consumer goods (4.3 percent).

The biggest increases in shipments were reported for China (20.9 percent); MERCOSUR countries (19.9 percent); Poland (19.1 percent); the US (12.1 percent); and Germany (10.3 percent). Meanwhile, sales fell to the Netherlands (-3.9 percent), Romania (-3.7 percent) and Switzerland (-3.5 percent).

Imports increased 6.1 percent to €30.42 billion from €32.90 billion in December 2015, led by gains in purchases of: Vehicles (29.3 percent); machinery and equipment (25 percent); coke and refined petroleum products (21.8 percent); crude oil (16.4 percent); and base metals (13.3 percent). Meanwhile, imports dropped for: transport equipment (-21 percent); and natural gas (-6.6 percent). By main industrial groups, purchases rose for: Capital goods (9.8 percent); energy (8.2 percent); intermediate goods (4.2 percent); and consumer goods (3.6 percent).

The rise in imports mainly reflected the increase in purchases from OPEC countries (67.7 percent), Turkey (29.7 percent), ASEAN countries (24.4 percent), MERCOSUR countries (17 percent) and Czech Republic (12.8 percent). By contrast, imports declined the most from the UK (-16.1 percent), China (-5 percent) and Romania (-2.6 percent).

With European Union countries, Italy registered a trade surplus of €0.12 billion, compared with a deficit of €0.30 billion euros in December 2015.

Considering the full year of 2016, the global trade surplus widened sharply to a record high of €51.57 billion from €41.81 billion in 2015. Exports grew 1.1 percent to €417.0 billion, due to higher sales of pharmaceutical products and medicines (6.8 percent), motor vehicles (6.3 percent), transport equipment (4.6 percent) and food, beverages and tobacco (4.2 percent). Exports went up to Japan (9.6 percent), China and Czech Republic (6.4 percent both), Spain (6.1 percent) and Germany (3.8 percent). Meanwhile, imports shrank 1.4 percent to €365.4 billion, due to lower purchases of natural gas (-28.5 percent) and crude oil (-20.4 percent). The drop in imports was mainly determined by purchases from Russia (-26.3 percent).




Thursday February 16 2017
France Jobless Rate Edges Down To 10.0% In Q4
Insee l Rida Husna | rida@tradingeconomics.com

Unemployment rate in France fell slightly to 10.0 percent in the three months to December of 2016, compared to an upwardly revised 10.1 percent in the September quarter while market expected 9.7 percent.

In metropolitan France only, with 2.8 million people, 9.7 percent of the active population was unemployed, down slightly from 9.8 percent in the previous three months. The unemployment decreased among youths and persons aged 50 and over while it increased for men aged 25 to 49. Compared to the previous year, it dropped by 0.2 percentage points. Among inactive people, 1.5 million wish to work but they are not considered as unemployed (unemployment halo). The number of people in the unemployment halo rose 21,000 quarter-on-quarter in the December quarter and up by 65,000 over a year.

In the December quarter, the employment rate of the population aged 15-64 years stood at 64.7 percent, up 0.1 percentage points compared to the third quarter. Permanent employment rate for people aged 15-64 came in at 48.7 percent, up by 0.2 percentage points quarter-on-quarter and by 0.1 percentage points year-on-year. Meanwhile, fixed term and temporary contracts employment rate stood at 7.5 percent, up 0.1 percentage points from the previous quarter and over the year.

The activity rate of people aged at 15-64  stood at 71.7 percent in the fourth quarter, the same as in the prior quarter but up 0.1 percentage points from the December quarter 2015.

About  6.2 percent of the persons employed were underemployed, decreasing by 0.1 percentage points over the quarter. Slack work stood at 0.2 percent of the persons employed. 




Thursday February 16 2017
Indonesia Trade Surplus Largest In 3 Years In January
Statistic of Indonesia l Chusnul Ch Manan | chusnul@tradingeconomics.com

Indonesia posted a trade surplus of 1.39 USD billion in January of 2017, compared to a 13.6 USD million surplus a year earlier and above market estimates of a 0.85 USD billion surplus. It was the largest surplus since December 2013, as exports rose much more than imports.

Year-on-year, exports from Indonesia jumped 27.71 percent from a year earlier to 13.38 USD billion in January of 2017, compared to a 15.57 percent rise in December 2016 while market estimated a 21.73 percent growth. It was the fourth straight month of increase and the fastest since September 2011, as sales of non-oil and gas products went up 29.24 percent to 12.11 USD billion while those of oil and gas rose by 14.77 percent to 1.27 USD billion
 
Imports went up 14.54 percent to 11.99 USD billion, following a 5.82 percent growth in a month earlier while markets expected a 13.88 percent gain. It was the fourth consecutive month of increases, as purchases of non-oil and gas rose 10.12 percent to 10.18 USD billion while those of oil and gas increased 48.03 percent to 1.81 USD billion.

Compared to the previous month, outbond shipment decreased 3.21 percent, as non-oil and gas products dropped by 3.70 percent while sales oil exports increased by 1.72 percent. By categories, outbound shipments rose for: mineral fuels (0.58 percent), rubber and rubber goods (10.55 percent), iron & steel (21.22 percent), vehicles & parts (7.93 percent), machinery/aircraft mechanics (7.23 percent) and goods from iron & steel (21.22 percent). In contrast, sales decreased for:  jewelry, gems (-14.71 percent), apparel not knitted (-8.82 percent), and ore, cruct and gray metal (-27.56 percent)
 
Sales went up to India (42.91 percent). In contrast, exports fell to most of the country's trading partnes : the ASEAN countries (-12.62 percent), the EU (-4.44 percent), Japan (-6.75 percent), China (-17.52 percent), the US (-2.13 percent), South Korea (-10.53 percent), and Taiwan (-11.65 percent).
 
Compared to the prior month, inbound shipments decreased by 6.21 percent. While purchases of non-oil and gas went down 8.12 percent, those of oil and gas increased by 6.25 percent. Imports went up the most for raw material (20.92 percent to 9.06 USD billion), followed by capital goods (6.04 percent to 1.92 USD billion). In contrast, purchases decreased for consumption goods (-13.39 percent to 1 USD billion).
 



 




Thursday February 16 2017
Malaysia GDP Growth Strongest In A Year In Q4
Bank Negara Malaysia | Rida Husna | rida@tradingeconomics.com

Malaysian economy expanded 4.5 percent year-on-year in the fourth quarter of 2016, compared to a 4.3 percent growth in the previous three months and in line with markets expectations. It was the strongest expansion since the December quarter 2015, mainly supported by a rebound in exports and a faster increase in investment while private consumption remained robust.

In the December quarter, private consumption grew by 6.2 percent year-on-year, slower than  a 6.4 percent rise in the previous quarter, supported by continued wage and employment growth. Public consumption contracted by 4.2 percent, compared to a 2.2 percent growth in the third quarter, due to rationalisation of  spending on supplies and services and a moderation in growth of spending on emoluments. Gross fixed capital formation rose 2.4 percent, faster than a 2.0 percent expansion in the preceding quarter. Private investment advanced by 4.9 percent, following a 4.7 percent rise in the third quarter, supported by continued capital spending in the services and manufacturing sectors. Meanwhile, public investment remained in contraction, following a 3.8 percent decline in the prior quarter. Exports rose 1.3 percent, rebounding from  a 1.3 percent decline in the September quarter. Imports also went up 0.7 percent, compared to a 2.3 percent fall in the previous three months.

On the production side, services sector grew the most by 5.5 percent (from 6.1 percent in the preceding three months, supported primarily by consumption-related services), followed by construction (5.1 percent from 7.9 percent, largely driven by the civil engineering sub-sector), mining (4.9 percent from 3.0 percent, due to an increase of natural gas output) and manufacturing (4.8 percent from 4.2 percent, supported by higher growth in both domestic and export-oriented industries). In contrast, the agriculture sector shrank 2.4 percent, slowing from a 6.1 percent contraction in the September quarter, due to diminishing impact of El Nino on crude palm oil yields. 

Moving forward, the external environment may continue to remain challenging while the Malaysian economy will experience sustained growth with the primary driver being domestic demand. Private consumption is anticipated to remain supported by wage and employment growth, with additional impetus coming from announced Government measures to support disposable income of households. Investment activity will continue to be anchored by the on-going implementation of infrastructure projects and capital spending in the manufacturing and services sectors.

On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1.4 percent, the same as a downwardly revised 1.4 percent growth in the previous period.

Considering full 2016, the economy advanced 4.2 percent, compared to a 5.0 percent expansion in 2015.






Thursday February 16 2017
Australia Jobless Rate Down To 5.7% In January
ABS | Rida Husna | rida@tradingeconomics.com

Australia's seasonally adjusted unemployment rate fell to 5.7 percent in January of 2017 from 5.8 percent in December while markets expected 5.8 percent. The labor force participation rate dropped slightly while the number of unemployed decreased by 19,300.

In January, the seasonally adjusted labour force participation rate came in at 64.6 percent, compared to 64.7 percent in the prior month and slightly less than estimates of 64.7 percent.

Employment increased by 13,500 to 11,998,200 and higher than markets consensus of 10,000 : full-time employment decreased 44,800 to 8,125,700 and part-time employment increased by 58,300 to 3,872,500.

Unemployment decreased 19,300 to 720,200. The number of unemployed persons looking for full-time work decreased 16,000 to 511,000 and the number of unemployed persons only looking for part-time work decreased by 3,300 to 209,200.

Seasonally adjusted aggregate monthly hours worked in all jobs increased 10.2 million hours to 1,682.7 million hours.




Wednesday February 15 2017
US Industrial Output Falls Unexpectedly In January
Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com

US industrial production fell by 0.3 percent month-over-month in January 2017, following a downwardly revised 0.6 percent rise in the previous month and worse than market expectations of a 0.1 percent gain. Utilities output dropped sharply by 5.7 percent due to unseasonably warm weather while manufacturing production grew 0.2 percent, matching analysts' forecasts, and mining output rose 2.8 percent.

Utilities output contracted by 5.7 percent, following an upwardly revised 5.1 percent growth in the previous month, largely because unseasonably warm weather reduced the demand for heating. 

By contrast, manufacturing production moved up 0.2 percent, the same as in December and in line with expectations; and mining output jumped 2.8 percent after falling by 1.4 percent in the previous month.

Compared to the same month of 2016, industrial output showed no growth, as a sharp drop in utilities output (-2.6 percent) offset an increase in both manufacturing (0.3 percent) and mining (0.4 percent).

Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972-2016) average.




Wednesday February 15 2017
Ghana Inflation Rate Lowest Since November 2013
Ghana Statistical Service | Deborah Neves | deborah.neves@tradingeconomics.com

The annual inflation rate in Ghana slowed to 13.3 percent in January of 2017 from 15.4 percent in the previous month. It was the lowest inflation rate since November of 2013, as non-food cost rose at a slower pace namely for housing and utilities and transport and food prices also increased less.

Non-food inflation fell to 16.6 percent (18.2 percent in the previous month) as cost increased at slower pace for housing and utilities (4.4 percent from 20.2 percent), transport (24.6 percent from 27.2 percent) and health (18.2 percent from 18.5 percent).

Additional upward pressure came from: education (25.1 percent from 23.4 percent), recreation and culture (24.4 percent from 20.3 percent), furnishings and household items (22.1 percent from 18.8 percent), clothing and footwear (18 percent from 16.4 percent), miscellaneous goods and services (15.9 percent from 14.7 percent), hotels, cafés and restaurants (13.3 percent from 13.7 percent), alcohol beverages and tobacco (13.7 percent from 13.5 percent) and communication (12.6 percent from 10.8 percent).

Moreover, prices of food and non-alcoholic beverages items increased at a slower 7 percent from 9.7 percent in December, namely vegetables (1.6 percent from 5.5 percent), milk and cheese products (4.6 percent from 6.9 percent), fruits (5.4 percent from 9.2 percent), meat and meat products (11.6 percent from 15 percent) and coffee, tea and cocoa (7.8 percent from 14 percent).

On a monthly basis, consumer prices jumped 2.8 percent, following a 0.9 percent increase in the previous month.




Wednesday February 15 2017
US Retail Sales Rise More Than Expected In January
US Census Bureau | Joana Ferreira | joana.ferreira@tradingeconomics.com

Retail sales in the United States increased by 0.4 percent month-over-month in January 2017, following an upwardly revised 1 percent rise in December and above market expectations of a 0.1 percent gain. Higher sales at gasoline stations, restaurants and electronics and appliances stores offset a sharp drop in motor vehicle purchases.

11 out of 13 major retail categories showed gains in January while 2 declined.

The biggest increases were recorded at: Gasoline stations (2.3 percent from 3.2 percent in December); sporting goods, hobby, book and music stores (1.8 percent from -0.2 percent); food services and drinking places (1.4 percent from -1.1 percent); electronics and appliance stores (1.6 percent from -1.1 percent).

By contrast, sales of motor vehicles dropped 1.4 percent, the biggest decline in 10 months, after rising by 3.2 percent in December.

The so-called core retail sales that exclude automobiles, gasoline, building materials and food services and correspond most closely with the consumer spending component of gross domestic product, rose 0.4 percent after an upwardly revised 0.4 percent gain in December.

Compared to January last year retail sales were up 5.6 percent. 




Wednesday February 15 2017
US Inflation Rate At Near 5-Year High Of 2.5%
BLS | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in the United States increased 2.5 percent year-on-year in January of 2017, following a 2.1 percent rise in December and above market expectations of 2.4 percent. The inflation rate accelerated for the sixth consecutive month to the highest since March of 2012, mainly boosted by gasoline prices.

Year-on-year, energy prices jumped 10.8 percent, following a 5.4 percent rise in December. In addition, inflation accelerated for transportation services (3.2 percent from 2.8 percent in December) but eased for shelter (3.5 percent from 3.6 percent) and medical care (3.6 percent from 3.9 percent). Meanwhile, food prices declined 0.2 percent, the same as in December. 

Annual core inflation, which excludes food and energy, rose to 2.3 percent from 2.2 percent in the previous month and beating expectations of 2.1 percent.

On a monthly basis, consumer prices increased 0.6 percent, higher than 0.3 percent in December and also above forecasts of 0.3 percent. It is the highest monthly rate since February of 2013. Energy prices increased 4 percent as gasoline jumped 7.8 percent, accounting for nearly half the increase in CPI. Food cost, which had been unchanged for 6 consecutive months, increased 0.1 percent. The food at home index was unchanged, while the index for food away from home rose 0.4 percent. Additional upward pressure came from prices of apparel, new vehicles, motor vehicle insurance, and airline fares all rising 0.8 percent or more. The shelter index went up 0.2 percent, a smaller increase than in recent months.

Excluding food and energy, prices rose 0.3 percent, above 0.2 percent in the previous two months and beating expectations of 0.2 percent. 




Wednesday February 15 2017
Nigeria Inflation Rate Highest Since September 2005
National Bureau of Statistics | Deborah Neves | deborah.neves@tradingeconomics.com

Nigeria's consumer prices increased by 18.72 percent year-on-year in January of 2017, following 18.55 percent rise in the previous month. The inflation rate accelerated for the 12th straight month to the highest since September 2005, as prices continued to rise for food and housing and utilities.

Compared to January of 2016, cost of food increased by 17.8 percent following 17.4 percent in December (namely for bread and cereals; meat, oil and fats, and fish) while prices of imported food increased slightly less (21 percent from 21.1 percent). Additional upward pressure came from: housing and utilities (27.2 percent, at the same pace as in December); education (21 percent from 21.6 percent); clothing and footwear (17.9 percent from +18.8 percent); furnishings and household equipment (13.9 percent from 13.6 percent) and transport (17.2 percent from 17.3 percent).

Annual core inflation rate edged down to 17.85 percent from 18.03 percent in the previous month.

On a monthly basis, consumer prices went up 1.01 percent compared with a 1.06 percent rise in the previous month, as cost rose for: food (+1.3 percent); imported food (+0.9 percent); housing and utilities (+0.6 percent); and clothing and footwear (+0.9 percent).




Wednesday February 15 2017
Irish Trade Surplus Narrows 1% MoM In December
CSO | Joana Ferreira | joana.ferreira@tradingeconomics.com

Irish seasonally adjusted trade surplus decreased by 1 percent to €4,018 million in December 2016 from an upwardly revised €4,060 million in the previous month, as exports fell by 6 percent and imports declined by 10 percent, preliminary figures showed.

Seasonally adjusted goods exports decreased by €646 million, or 6 percent, to €9,608 million compared with November 2016; and imports also decreased, by €604 million, or 10 percent, to €5,590 million, preliminary figures showed.

Year-on-year, the non-seasonally adjusted value of exports decreased by €415 million, or 5 percent, to €8,836 million, due to lower sales of medical and pharmaceutical products (-16 percent), and office machinery and automatic data processing machines, including computers (-23 percent). Meanwhile, exports of electrical machinery, apparatus and appliances rose 143 percent.

The EU accounted for €4,616 million, or 52 percent, of total goods exports, of which €1,060 million went to the UK and €1,037 million to Belgium. The US was the main non-EU destination accounting for €2,109 million, or 24 percent, of total exports in December 2016. Exports to the EU increased by €36 million, or 1 percent, while exports to the rest of the world decreased by €450 million, or 10 percent. 

Meanwhile, imports went down by €1,449 million, or 21 percent, to €5,545 million compared with December 2015, mainly due to lower purchases of road vehicles (-10 percent), organic chemicals (-43 percent) and medical and pharmaceutical products (-25 percent).

The EU accounted for €3,629, or 65 percent, of the value of goods imports, with €1,421 million, or 26 percent, of total imports coming from the UK. The US with €593 million, or 11 percent, and China with €402 million, or 7 percent, were the main non-EU sources of imports. Imports from the EU decreased by €864 million, or 19 percent and imports from the rest of the world also decreased by €585 million, or 23 percent.

In 2016, the trade surplus widened sharply to €47.3 billion from €42.3 billion in 2015. Exports jumped 4 percent to a record high of €116.9 billion, mainly boosted by sales of electrical machinery, apparatus and appliances (150 percent) and organic chemicals (10 percent). Among major trading partners, exports to the UK decreased by 4 percent and those to EU countries fell 0.3 percent while sales to the US and to the rest of the world rose by 12 percent and by 9 percent, respectively. Meanwhile, imports shrank 0.7 percent to €69.6 billion, dragged by mineral fuels, lubricants and related materials (-27 percent) and machinery specialised for particular industries (-48 percent). Imports from the UK decreased by 8 percent and those from EU countries and from the rest of the world dropped by 1 percent each.




Wednesday February 15 2017
Spanish Inflation Rate At More Than 4-Year High
INE | Joana Ferreira | joana.ferreira@tradingeconomics.com

Spanish consumer prices rose 3 percent from a year earlier in January 2017, following a 1.6 percent increase in the previous month and in line with the preliminary reading. It was the highest inflation rate since October 2012, as prices rose at a faster pace for transport, housing and food.

Year-on-year, the biggest upward pressure came from: Transport (7.6 percent from 4.7 percent in December); housing and utilities (7.4 percent from 0.8 percent); and food and non-alcoholic beverages (1 percent from 0.8 percent). Prices also rose for: Miscellaneous goods and services (1.4 percent); hotels, cafés and restaurants (1.2 percent); recreation and culture (0.9 percent); and clothing and footwear (0.9 percent). Meanwhile, cost fell 0.2 percent for furnishings and household equipment.

Annual core inflation, which strips out volatile food and energy  prices, was 1.1 percent, compared to a reading of 1 percent a month earlier. 

On a monthly basis, consumer prices fell 0.5 percent, following a 0.6 percent gain in December due to lower prices for clothing and footwear (-15.3 percent) and recreation and culture (-1.5 percent).

The EU-harmonised index rose by 2.9 percent on the year, the biggest gain since December 2012, but fell 1 percent on the month.




Wednesday February 15 2017
Eurozone Trade Surplus Widens In December
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Eurozone trade surplus rose to €28.1 billion in December 2016 from €24.4 billion in the same month of the previous year and above market consensus of €22.8 billion. Exports increased 6 percent to €178.6 billion while imports went up at a slower 4 percent to €150.5 billion.

Exports of goods to the rest of the world advanced 6 percent to €178.6 billion in December 2016 from €168.7 billion a year earlier; while imports increased at a slower 4 percent to €150.5 billion compared to €144.4 billion in December 2015.

Considering 2016 full year, the trade surplus widened to €273.9 billion from €238.7 billion in 2015, as exports were nearly unchanged at €2,047.8 billion while imports fell 2 percent to €1,774 billion.

Meanwhile, the European Union recorded a €20.9 billion surplus in trade in goods with the rest of the world, compared with a €20.6 billion surplus in December 2015. Exports went up 5 percent to €164.4 billion from €156.1 billion a year earlier; and imports rose 6 percent to €143.5 billion compared to €135.4 billion.

Considering 2016 full year, the European Union recorded a surplus of €39.3 billion, compared with €59.9 billion in 2015. Exports of goods dropped 2 percent to €1,745.7 billion from €1,789.2 trillion a year earlier, led by a fall in sales of energy (-13 percent) and other manufactured goods (-2 percent) while exports of food and drinks rose (2 percent). Imports shrank 1 percent to €1,706.4 billion from €1,729.2 billion, as purchases declined the most for energy (-20 percent) and raw materials (-5 percent). Among trading partners, the biggest decreases in shipments were reported for South Korea (-7 percent) and Switzerland (-5 percent); while the decline in imports mainly reflected the strong fall in purchases from Norway (-15 percent) and Russia (-13 percent). 




Wednesday February 15 2017
UK Unemployment Rate Unchanged At 11-Year Low
ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com

UK unemployment rate held at an 11-year low of 4.8 percent in the period between October and December 2016, in line with market expectations. The employment rate hit a new all-time high of 74.6 percent as the number of people in work rose by 37 thousand while wage growth slowed.

Estimates from the Labour Force Survey show that, between July to September 2016 and October to December 2016, the number of people in work increased, the number of unemployed people was little changed, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) decreased.

There were 1.60 million unemployed people (people not in work but seeking and available to work), little changed compared with July to September 2016 but 97,000 fewer than for a year earlier. There were 877,000 unemployed men, little changed compared with July to September 2016 but 48,000 fewer than for a year earlier. There were 720,000 unemployed women, little changed compared with July to September 2016 but 50,000 fewer than for a year earlier. The unemployment rate was 4.8 percent, down from 5.1 percent for a year earlier. It has not been lower since July to September 2005. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) that were unemployed.

There were 31.84 million people in work, 37,000 more than for July to September 2016 and 302,000 more than for a year earlier. There were 23.29 million people working full-time, 218,000 more than for a year earlier. There were 8.55 million people working part-time, 84,000 more than for a year earlier. The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.6 percent, the highest since comparable records began in 1971.

There were 8.86 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 31,000 fewer than for July to September 2016 and 61,000 fewer than for a year earlier. The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.6 percent, slightly lower than for July to September 2016 (21.7 percent) and lower than for a year earlier (21.8 percent).

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.6 percent, both including and excluding bonuses, compared with a year earlier.




Wednesday February 15 2017
Sweden Holds Repo Rate at -0.5%
Riksbank | Joana Ferreira | joana.ferreira@tradingeconomics.com

Sweden's central bank held its benchmark repo rate at -0.5 percent on February 15th, 2017, as widely expected, saying a continued strong level of economic activity and a krona that does not appreciate too rapidly are required for inflation to stabilise around the 2 percent target. Policymakers added that there is still a greater probability that the rate will be cut than that it will be raised in the near term and that purchases of government bonds will continue for the first six months of 2017, as was decided in December.

Excerpts from the Statement by the Executive Board of the Riksbank:

The economic outlook abroad is brighter in the near term, and the recovery is continuing in line with earlier forecasts. At the same time, there is considerable political uncertainty in several areas of the world, which means that the risks of setbacks have increased.

In Sweden, the Riksbank's expansionary monetary policy has contributed to high growth, falling unemployment, rising inflation and inflation expectations that are back at 2 per cent. CPIF inflation was close to 2 per cent in December, but the recent upturn has been primarily driven by a temporary rise in energy prices. Excluding energy prices, inflation is still low. The strong economic activity creates good conditions for inflation to continue rising. However, inflation is not expected to stabilise around 2 per cent until the end of 2018.

The krona exchange rate continues to create uncertainty about the development in inflation. Since December, the krona has been clearly stronger than expected. This rapid appreciation is not expected to continue, however. The Riksbank's forecast is for the krona to appreciate slowly as economic activity improves.

To ensure inflation stabilises around the target, it is necessary for economic activity to remain strong and for the krona to appreciate at a not too rapid pace. The political uncertainty abroad is enhancing the need for monetary policy to remain expansionary. The Executive Board has decided to hold the repo rate unchanged at -0.50 per cent. The repo rate path reflects the fact that there is still a greater probability that the rate will be cut than that it will be raised in the near term, and that slow increases will not begin until the start of 2018. Purchases of government bonds will continue for the first six months of 2017, as decided in December 2016. Until further notice, maturities and coupon payments will be reinvested in the government bond portfolio. The Executive Board has also taken a decision to extend the mandate that facilitates a quick intervention on the foreign exchange market.

The Executive Board is still prepared to make monetary policy more expansionary if the upward trend in inflation were to be threatened and confidence in the inflation target weakened. All of the tools that the Riksbank has described earlier, most recently in the September 2016 Monetary Policy Report, can as always be used if necessary.

Monetary policy needs to be expansionary to safeguard the role of the inflation target as nominal anchor for price-setting and wage formation. But the low interest rate levels also entail risks, such as those linked to the high and increasing household indebtedness. To achieve long-term sustainable development in the Swedish economy, these risks need to be managed via targeted measures within housing policy, fiscal policy and macroprudential policy.