Following one of the fastest growing quarters in twenty years, Germany’s central bank, the Bundesbank, increased its growth prediction for the second half of the year to 3 percent from 1.9 percent.
“The growth tempo will normalize after the extraordinarily dynamic second quarter,” the Bundesbank said. “But all in all, the fundamental economic situation in Germany is very favorable at the moment.”
The increase in economic activity can be traced almost entirely to growing global demand for goods produced in Germany.
Source: Bloomberg
The number of people seeking unemployment benefits jumped by 12,000 last week to 500,000 matching levels not seen since last November. This latest result adds further evidence pointing to a weakening of the recovery, suggesting that companies are slowing the rate of hiring. This meshes with statements from the Federal Reserve last week that the US recovery will be “more modest” than originally predicted.
“We’re seeing a renewed pickup in layoffs,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “If firms aren’t hiring it’s probably because they’re not producing. Demand will slow in the third quarter.”
Source: Bloomberg
An over-supply of homes is hampering economic recovery in the US said President Obama during a stop in Ohio.
“The housing market is still a big drag on the economy as a whole,” the President said. “It is going to take some time for us to absorb this inventory, that was really too high… We were building 2 million homes a year when only 1.4 were being absorbed.”
Source: BBC News
The European Commission said today that recent efforts by Greece to reduce its deficit has warranted releasing the next round of emergency funding. Greece has already received 20 billion euros (US$25.7 bn) of the 91 billion euros (US$145 bn) pledged in rescue loans.
“Greece has managed impressive budgetary consolidation during the first half of 2010 and has achieved swift progress with major structural reforms,” said European Economic and Monetary Affairs Commissioner Olli Rehn.
Source: BBC News
