I think MarketWatch got it right when it reported the US trade news: it's reflecting a growing global economy.
The U.S. trade deficit widened by 0.8% in May to $63.8 billion as both imports and exports set monthly records, the Commerce Department said Wednesday.
Reflecting a growing global economy, exports increased 2.4% to a record $118.7 billion, the biggest percentage gain since December 2004.
Record petroleum imports -- due to record prices and the largest quantity in 18 months -- helped to push up imports by 1.8% to a record $182.5 billion. The non-petroleum deficit fell to $43.2 billion, its lowest level in nine months...
After adjusting for inflation, real imports were flat and real exports rose 2%.
Whether the global economy can sustain its current growth rate is still uncertain, but at least the European Commission has largely maintained its growth forecast for the eurozone.
The commission cut its forecast for quarter-on-quarter growth in the three months to June to between 0.4 percent and 0.8 percent from previously forecast 0.5 percent to 0.9 percent, and also cut its outlook for growth in the three months to September to between 0.3 percent and 0.7 percent, also down from 0.5 percent and 0.9 percent. It raised its forecast for growth in the final quarter to 0.5 percent 1 percent from 0.4 percent to 1 percent.
Figures released by the EU's Eurostat agency showed gross domestic product in the eurozone during the first three months of this year was 0.6 percent higher than in the fourth quarter of last year, and 2 percent higher than in the first quarter of 2005.
However, the European Commission warned about global imbalances:
A "disorderly unwinding of global imbalances" could hit the euro area hard, the commission said in its report, warning that the "unprecedented size and duration" of these imbalances meant they could not go on indefinitely.
Tell that to the Japanese, whose current account surplus widened in May.
Japan's current account surplus widened for the third month in four as overseas demand for automobiles rose and companies brought home profit from abroad.
The surplus rose 15.9 percent in May to 1.61 trillion yen ($14 billion) from a year earlier, the Ministry of Finance said today in Tokyo...
The trade surplus...expanded 25 percent to 399.6 billion yen, the first time it widened for 19 months, the government said. Exports rose 18.8 percent, the largest gain since February, and imports advanced 20.1 percent.
While the trade data is good news for the Japanese economy, signs of rising inflation are not necessarily bad news either.
The corporate goods price index (CGPI) rose 3.3 percent in June from a year ago, BOJ data showed on Wednesday...
From a month earlier, the CGPI, which tracks trends in wholesale prices of goods, fell 0.1 percent compared with a median market forecast for a flat reading, pushed lower by a drop in non-ferrous metal prices.
But those prices, along with that of oil, continued to register sharp gains year-on-year -- a sign that the economy is shaking off seven years of deflation, blamed for crimping consumer spending and business investment.
Speaking of oil, its price does not look as though it is about to come down significantly anytime soon, flirting with US$75 a barrel again yesterday.
Oil prices jumped to $75 a barrel Wednesday on concerns about instability in the Middle East...
In its weekly petroleum report, the Energy Department said commercially available crude-oil inventories shrank by 6 million barrels to 335.3 million barrels. Crude supplies are still 2 percent higher than last year...
In its monthly report, the IEA trimmed its global oil-demand growth forecast for this year to 1.21 million barrels a day, but in its first outlook for 2007 it estimated demand would grow by 1.57 million barrels a day to a total of 86.37 million barrels a day.
The energy watchdog also said world oil demand is expected to increase by 2 percent per year in the next five years. Supplies are also expected to increase, but the IEA saw little prospect for significant price cuts.
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