Wednesday, 7 December 2005

Growth in US productivity, factory orders and European retail sales

There was more evidence that the US economy remains strong. From Reuters:

The Labor Department said nonfarm business productivity advanced at a 4.7 percent annual rate in the third quarter, the swiftest increase in two years.

The strong productivity gain pushed unit labor costs -- a key gauge of profit and price pressure -- down at a 1 percent pace despite a solid 3.7 percent rise in hourly compensation...

Separately, the Commerce Department said new orders at U.S. factories rose 2.2 percent in October after a 1.4 percent September drop, as soaring demand for aircraft offset weakness in cars, computers, metals and electrical equipment...

Demand for durable goods, big-ticket items meant to last at least three years, rose 3.7 percent in October, even as orders for autos fell 1 percent...

[T]he inventories-to-shipments ratio [slipped] to 1.17 months, matching a record low hit in August...

Not all indicators were positive though.

Separately, two reports showed U.S. chain store sales slipping in early December...

In the latest sign of cooling in the housing market, the National Association of Realtors said an index of pending sales of existing U.S. homes slipped in October to its lowest level since March...

Nevertheless, consumer confidence showed further evidence of recovery. From another Reuters report:

ABC News and the Washington Post said their Consumer Comfort Index rose to -14 in the week ending December 4 from -15 the prior week.

There was also some good news from Europe. Bloomberg reports:

An index of retail sales in the dozen nations sharing the euro rose to 50.7 from 50.4 in October, according to a survey for Bloomberg LP by NTC Research Ltd. published today. Factory orders in Germany rose 2 percent from September, the Economy Ministry in Berlin said, more than the 0.5 percent gain forecast by economists...

The UK industrial sector, however, continues to struggle, according to another Bloomberg report:

U.K. industrial production had its biggest decline in seven months in October... Industrial production unexpectedly fell 1 percent, after increasing 0.5 percent in September, the London-based Office for National Statistics said today... Manufacturing, which makes up 15 percent of the economy, fell 0.7 percent in October from September, the statistics office said...

But UK retail sales is finally showing some signs of recovery, according to yet another Bloomberg report:

Sales at U.K. stores rose for the first time in eight months in November as colder weather stoked demand for products such as clothing before the peak holiday season, the British Retail Consortium lobby group said today.

Revenue at outlets open at least a year rose 0.8 percent from November last year, the first increase since March, according to an e-mailed report from the London-based group that represents 80 percent of U.K. retailers. Sales of coats, sweaters and women's boots were boosted by the start of a cold snap, the BRC said.

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