U.S. retail sales increased 0.5 percent, the Commerce Department said on Tuesday, after rising 1.1 percent in September. That was above economists’ expectations for a 0.3 percent rise. In a separate report, the Labor Department said its producer price index fell 0.3 percent last month after rising 0.8 percent in September. Economists had expected the PPI to fall only 0.1 percent.
The rise in retail sales provided some hope that growth in the economy was gaining some momentum. A drop in wholesale prices was seen as a sign that inflation concerns remains low.
Source: Reuters
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers held steady in November. After a string of five consecutive months of negative readings, the general business conditions index rose nine points, to 0.6. While the new orders index edged down to -2.1, indicating that orders were a little lower, the shipments index rose to 9.4, indicating an increase in shipments. The inventories index fell to -12.2—a sign that inventory levels dropped. The prices paid index continued to move downward, reaching 18.3, its lowest level in nearly two years; the decline suggested that the pace of input price increases slowed further in November. The prices received index rose slightly, to 6.1, evidence that selling prices continued to increase. Employment indexes were mixed: employment levels were slightly lower and the average workweek slightly longer. Future indexes surged, indicating a widespread expectation that conditions would improve in the months ahead, with the future general business conditions index rising to its highest level since May.
Federal Reserve of New York
Statistics Canada announced this morning that the Canadian economy contracted during the 2nd quarter by 0.1 percent. Earlier predictions were for zero growth.
The government agency blamed the decline on a 2.1 percent drop in export sales due most likely to weaker consumer demand in Canada’s largest market, the United States. Despite the declining growth, Canadian Finance Minister Jim Flaherty does not foresee the possibility of Canada’s economy falling back into recession.
U.S. consumer spending rose to a five-month high in July as auto sales rose sharply providing some evidence that the economy continues to defy those suggesting a recession is inevitable. According to the Commerce Department, consumer spending rose 0.8 percent in July after a 0.1 percent decline the month before.
Source: Reuters
The latest GDP figures from Germany show that growth in the German economy declined in the second quarter to a barely-positive 0.1 percent. This is a dramatic drop from the 1.5 percent increase for the first quarter and considerably worse than the predicted 0.5 percent growth.
The news is particularly troubling in that analysts are now questioning Germany’s ability to carry the Eurozone and help see it through the ongoing credit crisis. With France also expected to show weaker growth for the quarter, it is expected markets will see losses as investors reassess the Eurozone’s prospects.
Source: BBC News
The Canadian dollar is gaining as a result of additional risk play pushing commodity prices higher. Canada is a major supplier of commodities and raw resources and stands to gain on an increase in global demand for these exports.
The Canadian dollar traded at 98.67 cents per U.S. dollar at 8:33 a.m. in New York, compared with 98.73 cents on Feb. 4. One Canadian dollar buys $1.0135. The loonie appreciated 0.1 percent to 83.32 yen, from 83.24.
Source: Bloomberg
US consumer spending failed to match predictions rising only 0.2 percent for the month of September. During the same month, incomes fell by 0.1 percent.
“The quarter ended on a softer note,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The report “reinforces the case for the Fed to act this week. It’s getting harder and harder to argue inflation is near where the Fed wants it to be.”
Source: Bloomberg
US stock markets are poised to open higher today following yesterday’s rally. Dow Jones futures were higher, up 31 to 10,389 and Standard & Poor’s 500 index futures rose 3.20 to 1,092.30 following upbeat earnings news from retail giants Wal-Mart and Home Depot.
In overseas trading, Japan’s Nikkei 225 index closed up 0.9 percent, while in Europe, London’s FT-SE 100 index fell 0.7 percent. Germany’s DAX index fell 0.1 percent, while the CAC-40 index in Paris fell 0.2 percent.
Source: Associated Press
Statistics Canada said today that manufacturing sales increased 0.1 percent in February over January due mostly to weaknesses in the energy and auto sectors. Analysts had expected an increase of 0.8 percent.
Source: Reuters
As has been mentioned many times already, a true US recovery is not possible until the housing sector improves. On that front, some good news was released this morning, as the Commerce Department announced that housing starts rose to a 16-month high based on an increase of 1.6 percent following the strong growth of 5.7 percent in February.
Of note however, is that most of the increase can be attributed to the building of multi-family homes a single-family dwellings actually fell by 0.9 percent.
Source: Associated Press
