Friday, 29 September 2006

US growth revised down

US second quarter growth has been revised down. Reuters reports:

Gross domestic product, which measures total economic activity within the United States, advanced at a revised 2.6 percent annual rate in the second quarter, down from the 2.9 percent estimated a month ago, the Commerce Department said...

The GDP report underlined how a cooling housing sector is affecting the overall economy. Investment in residential structures tumbled at the sharpest rate in more than a decade -- down at a revised 11.1 percent rate instead of the 9.8 percent reported a month ago...

There was some evidence of the housing sector's limited spillover in a separate report from the Labor Department. New claims for unemployment pay dipped 6,000 last week to a seasonally adjusted 316,000, a level economists consider shows a healthy hiring environment.

However, a third report from the Conference Board, measuring the number of help-wanted ads in U.S. newspapers, suggested that companies were not rushing to add to payrolls. Its help-wanted index dropped to a 45-year low 31 in August from 32 in July...

A prices gauge favored by the Fed -- personal spending excluding food and energy items -- rose at a revised 2.7 percent rate instead of the 2.8 percent reported a month ago. That topped the first quarter's 2.1 percent and was the highest since 2.8 percent in the first quarter of 2001.

The GDP report said corporate profits barely grew by a revised 0.3 percent in the second quarter rather than the 2.1 percent the Commerce Department estimated a month ago. That was a steep plunge from a 14.8 percent rate of profit growth in the first three months of this year.

There are fewer signs of cooling in Europe's economy. Bloomberg reports that Germany's unemployment rate fell in September.

The number of people out of work, adjusted for seasonal swings, fell 17,000 from August to 4.43 million, the lowest since August 2004, the Nuremberg-based Federal Labor Agency said today. Economists expected a decline of 25,000, according to the median of 39 forecasts in a Bloomberg News survey. The adjusted jobless rate held steady at 10.6 percent.

And house prices in the UK are up sharply this month, reports Reuters.

House prices jumped in September, the Nationwide Building Society said on Thursday, evidence that August's interest rate rise had done little to cool the property market.

The Nationwide said the cost of an average home rose 1.3 percent, bringing the annual rate of house price inflation to 8.2 percent -- its fastest rate since February 2005.

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