Economics Overview

This week, The Economist published an overview of the previous weeks economic headlines. Here are the overviews:

Economic and financial indicators
The euro area is booming. GDP in the single-currency block grew by 0.9% in the second quarter, its fastest pace since 2000. Germany and Spain grew at the same pace as the euro area as a whole; France was quicker, at 1.2%; Italy lagged behind a little, growing by 0.5%. The euro-area economy was 2.4% bigger in the second quarter than in the same quarter of 2005.

Japan's economy, by contrast, grew by only 0.2% in the second quarter, leaving it 2% higher than the year before. Companies sold goods from their stocks, rather than from fresh production. Exports also slowed, growing by just 0.9% in the quarter.

In America inflationary pressure eased a little. The annual rate of consumer-price inflation was 4.1% in July, compared with 4.3% in June. Core prices, which exclude those for energy and food, increased by 2.7% over the year, but the monthly gain of 0.2% was greeted with relief after four 0.3% rises in a row. The producer prices paid by companies rose by 4.2% in the year to July, but by only 0.1% compared with a month before.

The American housing market cooled further. Housing starts fell to an annual rate of 1.795m in July, the slowest pace for 20 months. Starts were 13.3% below their rate in the same month last year. Meanwhile, the National Association of Home Builders reported that its index of industry confidence was at its lowest since February 1991.

In America industrial production rose by 4.9% in the year to July. The hot weather raised the output of utilities by 2% in July alone. American industry as a whole operated at 82.4% of full capacity, 1.4 percentage points above its long-run average. The value of retail sales increased by 1.4% in July, leaving it 4.8% higher than a year before. America's trade deficit in goods and services narrowed to $64.8 billion in June, compared with $65 billion the month before. It attracted a net capital inflow of $75.1 billion in the same month. Its official creditors were net sellers of Treasury bonds and notes, but its private creditors bought $31.4 billion-worth.

In Britain annual consumer-price inflation was 2.4% in July, down from 2.5% in June. The unemployment rate rose to 5.5% in the second quarter, up from 5.2% in the first. Average earnings rose by 4.3% in the year to June.

Emerging-Market Indicators
Mexico's GDP grew by 4.7% in the year to the second quarter. Its industrial production expanded by 6.9% in the year to June, thanks to car exports and construction.

Hungary's GDP grew by 3.6% in the year to the second quarter, a disappointment after growth of 4.6% in the year to the first.

China's industrial production grew by 16.7% in the year to July, after expanding by 19.5% in the year to June. Its investment in fixed assets, such as factories and real estate, in urban areas was 30.5% greater in the first seven months of this year than in the same period of 2005. Meanwhile, consumer prices increased by just 1% in the year to July.