Inflation Showing Signs of Taking a Bite Out of Growth

Weekly Economic & Financial Commentary

U.S. Review

Inflation Showing Signs of Taking a Bite Out of Growth

• Consumer prices rose 0.2 percent in February, taking the yearover-year rate of inflation up to 2.2 percent. Other measures of inflation for the month also showed price pressures building.
• Retail sales fell for the third straight month in February, reinforcing our view that consumer spending has downshiftedto start the year.
• Industrial production bounced back in February after declining0.3 percent in January. Manufacturing output rose 1.2 percent for the month. Housing starts declined in February after a 10.1 percent surge to start the year.

Global Review

More Signs of Firming in Indian Economy

• Economic news out of India this week was broadly better than expected. That reinforced our view that with some of the structural reforms already implemented, India’s economy should be a top performer over the next few years.
• Elsewhere in the global economy, we also learned this week that Chinese retail sales in February were slightly softer than expected, growing at just 9.7 percent year over year, a slowdown from 10.2 percent the month prior.
• In the Eurozone, industrial production fell 1.0 percent in January, which brought down the year-over-year rate to 2.7 percent.

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