More signs of economic recovery

Contrary to expectations, there was no downward revision to US GDP growth in the second quarter. Bloomberg reports:

The U.S. economy took a first step toward recovering from the worst recession since the 1930s in the second quarter as companies reduced inventories, spending started to climb and profits grew.

Gross domestic product shrank at a 1 percent annual rate from April to June, less than the 1.5 percent decline projected by economists in a Bloomberg News survey, a Commerce Department report showed today in Washington...

Corporate profits, not included in the advance GDP estimate released in July, rose 5.7 percent from the first three months of the year, the biggest increase since the first quarter of 2005.

Growth may have turned positive since, with jobless claims falling, albeit slowly.

A separate report today showed 570,000 workers filed claims for unemployment benefits last week, down from 580,000 the previous week, the Labor Department said in Washington. While off the peak of 674,000 applications reached in the end of March, the figures compare with an average of 350,000 applications filed during the expansion that ended in December 2007.

As economic recovery gathers steam worldwide, the threat of deflation has been receding.

In Germany, consumers prices are no longer falling. Bloomberg reports:

Germany’s inflation rate unexpectedly rose to zero in August as higher clothing and holiday travel prices offset cheaper energy and food.

Consumer prices, calculated using a harmonized European Union method, were unchanged from a year earlier after dropping an annual 0.7 percent in July, the Federal Statistics Office in Wiesbaden said today. Economists had forecast a 0.4 percent decline, a Bloomberg News survey showed. On a non-harmonized basis, prices were also unchanged after falling 0.5 percent in July, the first annual decline in more than 22 years.

... In the month, consumer prices rose 0.4 percent, driven by rising fuel and heating costs.

This comes as German consumer confidence rises to a 15-month high, the GfK sentiment index increasing to 3.7 for September from 3.4 in August.

Meanwhile, asset prices are rising again in the UK. From Reuters:

British house prices rose for the fourth month running and at their fastest monthly rate in 2-1/2 years in August, the Nationwide Building Society said on Thursday, in a further sign the housing market is picking up.

The mortgage lender said house prices rose 1.6 percent this month after a 1.4 percent rise in July, taking the annual rate of decline down to 2.7 percent -- its smallest since April 2008 -- from 6.2 percent.