The reports probably will keep the Federal Reserve on course to increase interest rates in March. Mining output grew at 1.1 per cent in November, sharply down from 8.1 per cent last year, while electricity recorded a growth of 3.9 per cent against 9.5 per cent a year ago. It raised borrowing costs three times in 2017. This was 3.58 per cent in October 2017.
According to the credit rating agency, the uptick in the CPI inflation to a 17-month high in December 2017 validates the caution displayed by the Monetary Policy Committee in its recent reviews. The rising crude oil prices can further push the fuel inflation. Housing inflation increased to 8.25 per cent from 7.36 per cent in November 2017. Owners' equivalent rent of primary residence climbed 0.3 percent after gaining 0.2 percent in November. Prices also rose from the prior month for food, medical care and motor vehicles but declined for gasoline and clothing. The cost of both hospital and doctor visits increased 0.3 percent. Vegetables contributed 90 basis point to the month-on-month (MoM) rise in the headline inflation number. The government figures show that gas prices are up 6.9 percent from December 2016.
Reported by the Census Bureau, a dvance estimates of USA retail and food services sales for December 2017, adjusted for seasonal variation and holiday and trading-day differences, were $495.4 billion, an increase of 0.4 %. That lowered the year-on-year increase in the CPI to 2.1 percent from 2.2 percent in November.
The PCE price index was up 1.8% in November from a year earlier, and prices excluding food and energy rose 1.5% on the year.
"The uptrend seen in food inflation in recent months appears to have sustained in December", said Abhishek Upadhyay, economist at ICICI Securities PD.
The biggest gains came in the category known as "nonstore retailers" which rose 1.2 percent in the month and were up almost 13 percent compared to the same month of past year.
Apparel prices, however, fell 0.5 percent. This comes after a 0.2% increase in the previous month.
He explained that he was seeing "economic growth everywhere" and that three interest rate hikes are still a good base case for 2018. The economy grew at a 3.2 percent pace during that period.
"While the increase in spending wasn't as broadly based as one would like, the show of strength in recent months is a testament to the strong financial tailwinds, relating to wealth, income and credit, pushing on consumer backs", said Sal Guatieri, senior economist at BMO Financial Group.
BlackRock (BLK.N) rose 3 percent after the world's largest asset manager reported profit that beat estimates as investors flooded into the relatively low-priced funds.
PHD Chamber's President Anil Khaitan said that as the "teething problem of GST" have been nearly over, the growth in industry has come with a strong rebound and "we look forward the growth to become more strong in the coming quarters".