The US economy may slow down in the aftermath of the destruction from hurricanes...
White House economist Ben Bernanke said on Wednesday that the administration expects the hurricanes that battered the Gulf Coast to shave up to 1 percentage point from the U.S. growth rate in the third quarter, but that there was little chance of a recession.
...but the underlying economy is still relatively robust, as indicated by the durable goods report.
New orders for U.S. durable goods jumped more than expected in August... Demand for long-lasting durables climbed 3.3 percent in August, as orders for metals, machinery, computers and electronics rose, the Commerce Department said on Wednesday.
Orders excluding more volatile transportation surged 4.2 percent, the biggest rise since March 2004... Demand for non-defense capital goods excluding aircraft...rose 3.6 percent in August after a 3.3 decline in July. Orders of durable goods rose across all major categories.
And despite weakening consumer confidence, retailers remain hopeful that consumer demand will stay resilient.
Even as higher energy prices siphon more consumer dollars, buyers remain willing to move up the price continuum for goods with different styles or features that make life more convenient, company executives and analysts told the Reuters Consumer and Retail Summit. And high-end spending isn't limited to the wealthy either, they added.
This despite households going further into debt, as highlighted by Calculated Risk.
The household DSR (Debt Service ratio) set another record at 13.55%, up from 13.46% in Q1 '05. The owner FOR (Financial Obligation Ratio) set a new record of 16.37%, up from 16.25% in Q1 '05.
There was also plenty of data from Europe yesterday.
Confidence among German consumers and French executives declined in September... German consumer confidence slid to a nine-month low, the Nuremberg-based GfK market research company said today. An index gauging sentiment among 2,000 French manufacturers fell to 100 from 101 in August, according to Paris-based national statistics office Insee...
Business confidence unexpectedly increased in Germany, Italy and Belgium as the euro's 11 percent decline against the dollar this year makes European goods more competitive abroad, industry surveys published in the past week showed. In Italy, the Rome-based Isae Institute said today its confidence index rose to a 10-month high of 89.5 from a revised August reading of 87.8, its fourth straight advance.
Things look a bit gloomier in the UK.
The U.K. economy expanded at the slowest annual pace in more than 12 years in the second quarter... Europe's second-largest economy grew 1.5 percent from a year earlier, instead of the 1.8 percent estimated on Aug. 26, the Office for National Statistics said in London today... The economy grew an unrevised 0.5 percent from the first quarter, the statistics office said...
Britain's top business lobby, the Confederation of British Industry said today that its retail sales index slid to the lowest since records began in 1983 in September...
In a separate release, the statistics office also said the U.K. current-account deficit narrowed to 3.05 billion pounds in the first quarter, from a revised 7.34 billion pounds in the first.
In Sweden, the National Institute of Economic Research yesterday released its survey findings for business:
The confidence indicator for industry has fallen somewhat and is now slightly above the historic average. In the near future, satisfactory growth is expected but also a continued drop in industrial jobs.
...and for consumers:
Households remained optimistic in September. The Consumer Confidence Indicator (CCI), though down marginally from August at 13.2, was still the second highest this year.
In Switzerland, the Swiss Institute for Business Cycle Research released its index of leading indicators for September.
(Current level of the KOF economic barometer: September 0.77, August 0.70, July 0.63. Level a month ago: August 0.71, July 0.64). The forecast of an acceleration of GDP growth in the 4th quarter is confirmed by the latest development of the barometer. In addition, it is to be expected that the pick-up in growth will continue till the 1st quarter of the coming year.
And from Japan, another business sentiment indicator.
Small and medium-sized Japanese firms were more optimistic about economic conditions in September, a survey showed on Wednesday, suggesting the economy's recovery was spreading beyond big businesses.
The survey, by Shoko Chukin Bank, produced a reading of 50.4 in the diffusion index measuring business sentiment, above the neutral 50 level for the first time in 14 months and an improvement from 48.3 in August.
So what do all these add up to? An uncertain global economy that continues to be led by a resilient underlying US economy while Japan's economy recovers and Europe's remains mixed.
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