US export surge fuels optimism, UK jobless at 13-year high

Economic indicators over the past week highlighted a positive trend on both sides of the Atlantic, even though unemployment remained a drag on consumer spending.

In the UK, the jobless rate rose to its highest in almost 13 years in July and, while the pace of layoffs is slowing, economists cautioned that unemployment might remain a lagging factor in the country's economic recovery. The number of people out of work has risen by 210,000 to 2.47 million in the three months to July, taking the jobless rate up to 7.9%, the highest since 1996.

Retail sales were unchanged in August to give a 2% annual increase, marginally below expectations.

In the US, the week's economic data was stronger than expected as retail sales edged up by 2.7% in August, driven largely by car sales. Headline consumer prices rose 0.4%, slightly higher than expected, while there was a core increase of 0.1% in August.

The trade deficit rose sharply to $32 billion in July from a revised $27.5 billion in June, the highest monthly increase in a decade. However, a sharp increase in exports and imports supported optimism over improving economic conditions.

In Europe, the German ZEW index of investor and analyst sentiment in September was slightly weaker than expected at 57.7, although it improved from the 56.1 reading in August, a three-year high.

Eurozone inflation data confirmed a headline rate of -0.2% in August while the core rate was slightly higher than expected at 1.3%.

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