Weekly economic review: British economy returns to growth
US consumer prices see unexpected decline in March
The British economy returned to growth with the strongest monthly performance in 11 months.
On Friday, data revealed a 0.5% increase for its monthly gross domestic product for February, exceeding expectations of a 0.1% rise. Industrial production increased by 1.5%, bouncing back from a 0.5% decline back in January, driven primarily by a 2.2% rise in manufacturing output, notably stemming from the production of computer, electronic and optical products.
Services expanded by 0.3%, with notable contributions from computer programming, consultancy and related activities, telecommunications and publishing. Meanwhile, construction rose by 0.4%, claiming back a previous decline, driven by public new work and repair and maintenance. Over the first quarter, the GDP grew by 0.6%.
Meanwhile, US consumer prices saw an unexpected decline in March. A report published on Thursday by the Labour Department showed a drop of 0.1% in March, following a rise of 0.2% in February. Economists had forecasted consumer prices to increase by 0.1%. The annual rate of consumer price growth slowed to 2.4 last month, down from 2.8% in February, defying expectations of a slowdown to just 2.6%.
The steep decline was largely influenced by energy prices, which fell by 2.4% in March after a 0.2% increase in February. Gasoline prices dropped by 6.3%, balancing out higher costs for electricity and natural gas.
The core consumer price index (CPI), which excludes food and energy prices, inched up by 0.1 in March after rising by 0.2% in February. Core prices have been expected to rise by 0.3%. The annual rate of core consumer price growth also dropped to 2.8% in March, down from 3.1% in February. Core price growth was expected to dip to 3%.
Finally, eurozone retail sales increased for the first time in five months in February. Last Monday, data revealed weaker-than-expected growth, as retail trade volumes expanded by 0.3% against the expected 0.5%. Sales of food, drinks and tobacco recorded a monthly growth of 0.3%. Non-food product sales also obtained 0.3% contrasting to the 0.2% fall in January. Automotive fuel in specialised stores expanded by 0.2% after registering a nil growth in January. Year-on-year, retail sales increased 2.3%, above expectations of a 1.8% rise.
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