India's economy is among the fastest-growing. From AFP/CNA:
India's economy expanded by a faster-than-expected 9.4 percent in the year ended March, official data showed on Thursday, beating a government forecast of 9.2 percent.
In the meantime, US economic growth in the first quarter slowed to the weakest in more than four years, but the slowdown could already be history. From Reuters:
The Commerce Department revised down its estimate for first-quarter expansion in gross domestic product, or GDP, to a 0.6 percent annual rate from the 1.3 percent that it estimated a month ago...
The National Association of Purchasing Management-Chicago business barometer rose to 61.7 from 52.9 in April, leading analysts to predict the factory sector now is poised to grow...
In another report, the Labor Department said new claims for jobless pay fell 4,000 last week to 310,000, a sign the job market remains healthy enough to support consumer spending.
A separate Commerce Department report showed April construction spending edged up 0.1 percent after a revised 0.6 percent gain in March -- all because of more spending on commercial buildings that offset weak spending on home construction...
A report from the Office of Federal Housing Enterprise Oversight on Thursday showed home prices rose at the slowest pace in a decade in the first quarter. Average home prices crept up 0.5 percent in the first quarter from last year's closing quarter, leaving them 4.3 percent higher than a year ago.
Despite the better data going into the second quarter, Asha Bangalore thinks a Fed cut may still be needed.
... The outlook for private sector spending is tied to the direction of Fed policy. If the Fed remains focused on waiting until core inflation readings are at or below 2.0% before dropping the funds rate, there is good chance for private sector spending to show additional deceleration in the quarters ahead.
Are interest rates too high? Maybe that is why the S&P 500 only edged up to a new record high yesterday.
There is no talk of rate cuts in Europe though. Not with the kind of data reported yesterday by Bloomberg:
European business and consumer confidence unexpectedly rose in May as German unemployment held at a six-year low, keeping Europe's economy on course to outperform the U.S. for the first time since 2001.
An index of sentiment among executives and consumers in the euro region rose to 111.9 this month, the highest level since January 2001, from 111.0 in April, the European Commission in Brussels said today. Germany's jobless rate stayed at 9.2 percent, the lowest since May 2001, while an index of consumer confidence in France rose to a record, separate reports showed...
The pace of European expansion is raising concern that inflation will accelerate later this year, prompting European Central Bank policy makers to signal they may increase interest rates again. While a report today showed inflation stayed at 1.9 percent in May, under the bank's 2 percent limit, ECB council member Nicholas Garganas said the central bank will probably raise its inflation forecast next month and is keeping options "open" after the rate rise policy makers signaled for June.
In the UK, Bloomberg reports that mortgage approvals fell and consumer credit dropped to the lowest in a decade in April.
Lenders granted 107,000 loans for house purchases, the lowest in a year and down from a revised 112,000 in March, the Bank of England said today in London. Borrowing by consumers on credit cards, personal loans and overdrafts fell to 498 million pounds ($983 million), the least since March 1997...
Weaker demand for mortgages is adding to evidence that housing market gains are slowing. Home values rose 0.5 percent this month after gaining 0.9 percent in April, Nationwide Building Society said today.
But consumer confidence shot up to a two year-high in May while a survey showed yesterday that retail sales grew slightly more than expected in May and shops are looking to raise prices at the fastest rate in eight years.
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