The data from the US yesterday were consistent with continued slowdown in the economy. MarketWatch reports that retail sales fell:
Retail sales fell 0.2% in October after sinking a downwardly revised 0.8% in September... Excluding gasoline, retail sales rose 0.4%... Excluding autos, retail sales dropped 0.4%... Sales excluding both cars and gas rose 0.3% for the second straight month.
...as did producer prices:
In a separate report, the Labor Department said producer prices fell a greater-than-expected 1.6% in October, while core prices (which exclude food and energy) tumbled 0.9%.
Some economists downgraded their growth forecasts yesterday.
The weaker-than-expected sales figures led Lehman Bros. to lower its estimate of fourth-quarter growth to 2.8% from 3.2% annualized.
"We anticipate an average Christmas sales season, followed by aggressive discounting by retailers late in the month and into early January," said Roger Kubarych, an economist for HVB. "The rest of the winter will be much tougher for retailers, we suspect."
But some remain hopeful.
"While sales growth will slow, it will not collapse," [Scott] Hoyt wrote in an analysis published on Economy.com.
The news from the rest of the world was somewhat mixed.
Bloomberg reports a slowdown in Europe.
The euro-area economy expanded 0.5 percent from the previous quarter, when it grew 0.9 percent, Eurostat, the European Union's statistics office in Luxembourg, said today...
The German confidence index declined to minus 28.5 in November from minus 27.4 in October, the ZEW Center for European Economic Research said...
U.K. inflation was a slower-than-expected 2.4 percent in October, according to a report today by the Office for National Statistics in London...
Germany's economy, Europe's largest, expanded 0.6 percent in the latest three months from the second quarter, when it grew 1.1 percent, a government report showed today. That was slower than the 0.7 percent forecast in a Bloomberg survey. Italy's economy expanded 0.3 percent in the latest quarter, half the pace of the prior period.
Japan, on the other hand, performed better than expected. From Channel NewsAsia:
GDP growth came in 0.5%, much better than the 0.3% the markets were expecting...
Exports led the growth -- expanding by 2.7% -- while capital investment grew 2.9%...
[P]rivate consumption, which accounts for 55% of GDP, dropped 0.7% -- its biggest fall in three quarters.
For rapidly growing consumption, look to China. From Reuters:
China's annual retail sales growth quickened to 14.3 percent in October, the government said on Tuesday, beating expectations and confirming a well-entrenched trend of sturdy spending.
However, the World Bank thinks the Chinese economy needs to place even more reliance on domestic demand even as the overall economy cools in 2007. AFP/CNA reports:
The World Bank expects China's economy to grow by 10.4 percent this year and cool to 9.6 percent in 2007, but has warned that such fast paced growth was exacerbating structural imbalances...
Beijing needed to shift production from industry to services and rely more on domestic demand, strive for more even economic development across its population and environmentally sustainable growth, the report said.