Further evidence that the US economy is in the midst of a lull in growth came today in the form of the latest consumer sentiment reading. The Conference Board publishes a monthly consumer sentiment index that for the month of May, dropped to a six-month low of 60.8 from a revised 66 recorded in April.
The S&P/Case-Shiller report which tracks the latest house prices found that pricess declined by 5.1 percent in the first quarter of the year compared to the same period last year. Stubbornly high unemployment and elevated food and energy prices are making it difficult for consumers to make ends meet.
“The economy has slipped into a soft patch,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “In the second half, we’ll do better than we’ve been doing. As economic activity picks up, the labor market will improve as well.”
Source: Bloomberg
Despite the jobless rate trending higher to 7.8 percent in January from December’s 7.6 percent, the Canadian economy created four times the number of new jobs than predicted. Employment rose by 69,200 but the number of people looking for jobs jumped by 106,400. Nevertheless, the news was greeted by economists as further evidence that Canada’s economy will perform well in the new year.
“This adds confidence to the notion we are headed for a better year for growth and growth in the job market,” said Mark Chandler, head of Canadian currency and rates strategy at Royal Bank of Canada’s RBC Capital Markets unit in Toronto. “There isn’t a lot of slack in the labor market in Canada, certainly on a relative basis to other countries.”
Source: Bloomberg
Japan’s core consumer price index fell 0.6 percent in October year-on-year, compared to a 1.1 percent fall in September. This marks the twentieth straight month of price declines.
Adding to Japan’s deflation misery is a strong yen which makes Japan’s critical export industry less competitive when compared with other exporters. Data issued Thursday showed Japanese exports grew at their slowest pace of the year in October — further evidence that the country’s trade-reliant recovery is ebbing.
Source: AFP News
The US Labor Department reported that the number of new jobless claimants fell last week to 460,000. Despite the decrease of about 14,000 from the previous week, this was still higher than expected and provides further evidence that improvements in the US employment market remain tentative at best.
Late last year, the official unemployment tally was 10.1 percent. It fell to 9.7 percent in the first quarter of 2010, but has since crept upwards to 9.9 percent as of April.
Source: Associated Press
The US Commerce Department announced today that consumer spending in February increased by 0.3 percent over the previous month. The rate of increase was slightly lower than than the 0.4 percent registered in January, but maintained the five-month streak of spending increases, providing further evidence that the economy is slowly turning the corner.
The news was not all positive however as incomes remained stagnant following a 0.3 percent gain in January. The fear is that because wages failed to increase in February, March’s spending could be affected as shopper’s return to more cautious spending patterns.
Source: Associated Press
Further evidence to the weak pace of recovery in the UK came today in the form of the latest industrial output figures. For the month of January, output unexpectedly fell by 0.4 percent compared to the previous month, according to the latest figures from the Office for National Statistics (ONS). The result set off a minor shock wave as official estimates predicted a 0.3 percent increase.
On the positive side, year-on-year manufacturing actually increased 0.2 percent. Based on this, some analysts attempted to downplay the report, suggesting January’s result was simple a “rogue” number in what has otherwise been a string of monthly increases.
“The only comforting feature with manufacturing is that all the surveys show the output trend to be positive, which gives us confidence that January’s official reading is a bit of a rogue number,” noted Investec economist Philip Shaw.
Source: BBC News
China recorded a remarkable 46 percent increase in exports in February compared to the same month one year ago. The actual result was considerably higher than the earlier predictions of 35 to 40 percent and is likely to increase pressure from the US calling for the People’s Bank of China to allow the yen to appreciate.
For the past 18 months, China has pegged the yen to the US dollar. For American consumers particularly, this means that the cost of goods imported from China have remained unchanged and this certainly contributed to the impressive gains experienced by China. Naturally, this has also increased China’s trade gap with the US, and is sure to elicit further calls from the Obama administration to allow the yuan to increase in value.
“The recovery seems to have gained legs and this will give China’s government more confidence to start revaluing the yuan,” said Ren Xianfang, an economist at IHS Global Insight in Beijing.
However, China’s central bank governor, Zhou Xiaochuan, said at the weekend that the government was “very cautious” about easing exchange rate controls because the global economic outlook was still uncertain.
Source: BBC News
The US Labor Department announced today that the number of new claims for unemployment benefits fell to 512,000 last week. This is the lowest level of new claims in ten months providing further evidence that job cuts are slowly easing. Despite the slowdown in job cuts, companies still resist hiring and total unemployment moved up to 9.9 percent from 9.8 percent the month before.
Associated Press
The US Labor Department announced today that the number of new claims for unemployment benefits fell to 512,000 last week. This is the lowest level of new claims in ten months providing further evidence that job cuts are slowly easing. Despite the slowdown in job cuts, companies still resist hiring and total unemployment moved up to 9.9 percent from 9.8 percent the month before.
Associated Press