Thursday, 31 December 2009

Chicago barometer rises, eurozone lending declines

The US economic recovery appears to be on track. From Bloomberg:

Companies in the U.S. expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010.

The Institute for Supply Management-Chicago Inc. said today its barometer rose to 60, exceeding the most optimistic estimate of economists surveyed by Bloomberg News and the highest level since January 2006. The gauge, in which readings greater than 50 signal expansion, showed companies boosted production and employment as orders climbed...

Economists projected the Chicago index would drop to 55.1 from 56.1 in November, based on the median estimate of 53 projections in the Bloomberg survey. Forecasts ranged from 52 to 58.5.

However, in Europe, the economic news cast fresh doubts about the durability of the recovery. Again from Bloomberg:

Loans to households and companies in Europe posted their third straight annual decline in November as the economic slump curbed credit demand and made banks more reluctant to lend.

Loans to the private sector fell 0.7 percent from a year earlier after a drop of 0.8 percent in October, the European Central Bank said today. M3 money supply, which the ECB uses as a gauge of future inflation, shrank 0.2 percent in November, the first decline since records began in January 1981, after increasing 0.3 percent in October.

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