US retail sales for June increased by just 0.1 percent as consumers continue to battle with elevated unemployment and a slowing economy. Total sales however, were boosted by an unexpected increase in demand at auto dealers that will not influence figures on consumer spending for the second quarter that the government will publish later this month.
“Consumers are cautious,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “There is still pretty slow momentum. It still shows we’re in a fragile recovery.”
Source: Bloomberg
Latest figures show the UK economy grew at a rate of 0.8 percent in the third quarter easily surpassing the 0.4 percent predicted by analysts. The increase also follows a 1.2 percent jump in the second quarter.
“This is the second major GDP growth surprise in a row and suggests that the UK economy is more resilient than many had feared,” said James Knightley, economist at ING. “The government will no doubt take this as a sign that the private sector can fill the gap created by public sector cuts, but with consumer confidence, hiring intentions surveys and housing activity data all softening we remain cautious.”
Source: BBC News
Citing concerns that continued government spending to save the banking will prove too great a strain on finances, Standard & Poor’s downgraded the Irish Republic’s credit rating one notch AA-. This is Ireland’s lowest rating since 1995.
In its report, S&P estimated that the Irish government will spend upwards of 90 billion euros (US$101bn) to prop up the nation’s largest banks. This estimate was immediately dismissed by government officials as being “extreme and unrealistic”.
Source: BBC News
Japan’s finance minister urged the Bank of Japan on Friday to align policy with the deeply indebted government’s efforts to fight deflation, maintaining pressure for possible monetary easing or even government bond purchases.
BOJ Governor Masaaki Shirakawa did not rule out any policy options but reiterated the current level of bond buying — a step some policymakers have called for to tame bond yield gains — was appropriate for now.
Prime Minister Yukio Hatoyama echoed his finance chief, Naoto Kan, in calling for BOJ cooperation, telling parliament that the government will work with the central bank to overcome falls in prices. Data showed Japan’s narrowest measure of consumer inflation fell at a record pace in December.
Reuters
Chinese Premier Wen Jiabao said the government will cool property prices, resist pressure for the yuan to appreciate and keep inflation at ‘reasonable’ levels.
“Property prices have risen too quickly in some areas and we should use taxes and loan interest rates to stabilize” them, Wen said yesterday in an online interview with the official Xinhua News Agency. China will “absolutely not yield” to calls for currency gains, he said.
Bloomberg
