The OECD released its economic outlook yesterday. It said that activity has slowed in the United States and Japan but that the slowdown "should remain well-contained". In the meantime, activity has gathered speed in Europe. These conclusions certainly appear consistent with recent economic reports.
Yesterday's data from the US show that the economy continues to slow. Reuters reports:
Speaking at a luncheon in New York, [Fed chairman Ben] Bernanke said measures of core inflation...should ease gradually. He said, however, that risks to that forecast were still to the upside...
Bernanke also said the slowdown in the U.S. housing market had so far had little spillover effect on the rest of the economy and he said housing might already be stabilizing.
A report from the National Association of Realtors, which showed a surprise rise in existing home sales to a 6.24 million-unit annual rate in October, supported that view...
The pickup in home resales came on the back of falling prices. The industry group said the median home price dropped 3.5 percent from year-ago levels, the largest decline since records began in 1968.
While that spurred sales, inventories of homes for sale still rose 1.9 percent from September to 3.85 million units...
The Conference Board said its index of consumer sentiment slid to 102.9 this month from 105.1 in October. It was the lowest reading since August...
Orders for durables goods...fell 8.3 percent last month, the biggest drop since July 2000, the Commerce Department said...
The decline was propelled by a 21.7 percent fall in transportation orders...
But even excluding transportation, orders declined by 1.7 percent...
A proxy for business spending, orders for non-defense capital goods excluding aircraft, also took an unexpected dive, off 5.1 percent...
The higher inventory of existing homes means that the news on the housing market is mixed at best despite the higher sales number.
Earlier yesterday, we had news that indicates that Japan is unlikely to help offset any fall in consumer demand from the US. From Bloomberg:
Receipts at retailers fell a seasonally adjusted 0.2 percent in October from a month earlier amid warmer-than-usual weather, the trade ministry said today. Sales of winter clothes and electronics led the decline.
The good news for Japan, though, is that industrial production rose in October. Today from Bloomberg:
Factory output climbed a seasonally adjusted 1.6 percent from a month earlier, the Ministry of Economy, Trade and Industry said in Tokyo today. Gains were led by autos and semiconductors as production rose 7.4 percent from a year earlier, the biggest jump in more than two years.
At least Germany provided better news on the consumer yesterday. Again from Bloomberg:
A confidence index compiled by GfK AG and based on a November survey of about 2,000 people that aims to forecast households' expenditure one month ahead, increased to 9.4, the highest level since November 2001, from a revised 9.3, the Nuremberg-based market research company said in an e-mailed statement today. That matched the median of 24 forecasts in a Bloomberg News survey of economists.
"It was primarily driven by a rational decision to bring forward purchases, rather than shopping for fun" said Klaus Wuebbenhorst, chief executive officer at GfK. "But in general people are more comfortable with the economic outlook as unemployment falls."
In fact, the eurozone economy on the whole may still be a little too hot for the ECB. From FT:
Faster growth in eurozone lending to business on Tuesday strengthened the case for further European Central Bank interest rates increases as a governing council member dismissed French politicians’ concern about the euro’s rise as a “Pavlovian reaction”.
Lending to non-financial corporations increased at an annual rate of 12.9 per cent last month – up from 12.7 per cent in September and the fastest since the launch of the euro in 1999, according to ECB figures on Tuesday...
... M3, the broad money supply measure that the ECB uses to help forecast longer term inflationary trends, continued to grow at a brisk pace in October. However, the 8.5 per cent annual growth rate for M3 was lower than expected and unchanged from September.
... Figures for eurozone lending to households showed lending for house purchases decelerated from an annual growth rate of 11 per cent in September to 10.4 per cent in October. Growth in consumer credit slowed from 8.3 per cent to 7.7 per cent.
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