Saturday, 14 February 2009

Eurozone economy shrinks, US consumer confidence falls

The eurozone economy shrank in the fourth quarter. Bloomberg reports on Friday:

Gross domestic product in the euro region declined 1.5 percent from the previous three months, the European Union’s statistics office in Luxembourg said today. That was more than the 1.3 percent economists expected and the most since euro-area GDP records began in 1995. From a year earlier, GDP fell 1.2 percent in the fourth quarter, the only full-year drop on record.

In the US, the economy looks as though it is continuing to deteriorate in the current quarter. From Bloomberg:

Confidence among U.S. consumers approached its lowest level since 1980 this month after job losses mounted and the slide in home values deepened.

The Reuters/University of Michigan preliminary index of consumer sentiment fell for the first time in three months, to 56.2. The gauge reached a low of 55.3 in November.

Thursday's positive report on retail sales is looking like an anomaly.

The Commerce Department yesterday said retail sales unexpectedly halted a six-month slide in January, helped by spending on items such as clothing and food and higher prices for gasoline that boosted receipts at filling stations. Economists said the gains may not last, citing reports from other retailers and ongoing job losses.

Indeed, another report on Thursday had pointed to continuing job losses.

Reports point to further job losses. The number of Americans on unemployment-benefit rolls rose to 4.81 million in the week ended Jan. 31, the Labor Department said yesterday.

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