Economy Highlights

US - Producer prices rise more than forecast, led by food, oil

Wholesale costs in the US rose more than forecast in February, led by food prices at a more than three-decade high and a surge in energy. The producer-price index climbed 1.6% from the prior month, the most since June 2009, Labor Department figures showed. The median projection in a Bloomberg News survey was for a 0.7% gain. The so-called core measure, which excludes volatile food and energy costs increased 0.2, matching forecasts. (Bloomberg)


UK - Jobless claims unexpectedly fall most in eight months

UK unemployment claims unexpectedly fell in February by the most in eight months, adding to signs that the economy may be recovering from the impact of the winter freeze. Jobless benefit claims dropped 10,200 from January to 1.45 million, the lowest since Feb 2009, the Office for National Statistics said. Economists forecast an increase of 1,300, according to the median of 24 predictions in a Bloomberg News survey. Unemployment based on International Labour Organization methods rose by 27,000 in the three months through January to 2.53 million, the highest since 1994. (Bloomberg)


EU - February inflation quickens, adding pressure on ECB

European inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January, the European Union’s statistics office in Luxembourg said, confirming a 1 March estimate. That’s the fastest since Oct 2008 and exceeded the ECB’s 2% limit for a third month. Labor costs rose 1.6% in the fourth quarter from a year ago, after increasing 0.9% in the third quarter, a separate report showed. (Bloomberg)


EU - Stocks slump the most in four months on nuclear concern

European stocks slumped the most in four months as concern grew that a Japanese nuclear power plant damaged by last week’s earthquake will leak radiation. Carmakers and chemical shares led losses on the Stoxx Europe 600 Index as all 19 industry groups lost at least 1.5%. Utilities E.ON AG and RWE AG sank more than 2%, while renewable-energy companies rallied as Germany said it will halt its seven oldest nuclear reactors as part of a safety review. BHP Billiton Ltd. led a selloff in basic-resource shares as metal prices retreated. The Stoxx 600 tumbled 2.3% to 266.32 at the 4:30p.m close in London, sliding below its 200-day moving average for the first time since August. The VStoxx Index, which measures the cost of protecting against declines in the Euro Stoxx 50 Index, climbed 16% to 31.01, the largest gain since November. (Bloomberg)


Japan - Quake rebuilding may revive laggard northeast

Reconstruction from Japan’s record earthquake and ensuing tsunami may help revive a farming and manufacturing region that was already lagging behind the rest of the economy. Job prospects in Miyagi, where an estimated 10,000 people were killed, were worse than in most of the nation’s 47 prefectures in January. Neighboring Iwate had been hemorrhaging workers to Tokyo, while Fukushima was becoming increasingly dependent on its remaining factories even as Japanese manufacturers move abroad to emerging Asian markets. Prime Minister Naoto Kan’s government aims to compile a relief package as soon as next month, with the biggest opposition party calling for a JPY 5trn (USD62bn) effort, about USD5bn more than South Korea’s 1997 bailout package. (Bloomberg)