China's economy accelerated in the first quarter. AFP/CNA reports:
China's economy grew a blistering 11.9 per cent in the first quarter, the government said Thursday, increasing pressure on Beijing to raise interest rates and loosen controls on its currency.
Gross domestic product in the world's third-largest economy maintained double-digit growth for the second straight quarter after expanding 10.7 per cent in the last three months of 2009.
Consumer price inflation slowed though.
The nation's closely watched consumer price index, the main gauge of inflation, rose 2.2 per cent in the first quarter compared with the same period a year earlier, the statistics bureau said.
The increase was slower than in February when consumer prices rose 2.7 per cent and below the government's inflation target of three per cent for the year...
This allowed Chinese authorities to focus on asset price inflation. From Bloomberg on Thursday:
China’s cabinet raised minimum mortgage rates and down payment ratios for some home purchases, saying “more forceful” steps are needed to cool speculation after property prices rose at a record pace in March.
Down payments for second homes must be at least 50 percent, up from 40 percent, and interest rates can’t be lower than 110 percent of benchmark rates, the State Council said in a statement, citing decisions made during a meeting yesterday. Banks should also raise down payment ratios and rates for third homes “by a broad margin.”
Meanwhile, the US economy is not doing too badly either. From Reuters:
Data on Thursday indicated manufacturing may continue leading growth for a while. Analysts said recovery should then shift from government stimulus and stockpiling to consumers once hiring picks up in the factory sector...
Expansion in manufacturing was highlighted by the New York Federal Reserve's "Empire State" general business conditions index which rose to a six-month high of 31.86 in April from 22.86 last month. Markets had expected a reading of 24.
Separately, the Philadelphia Federal Reserve Bank's business activity index rose to the highest level in four months during April. The rise in the index to 20.2 from 18.9 the prior month was a touch above market expectations.
A report from the Federal Reserve showed overall industrial production rose only 0.1 percent in March as heating needs fell, manufacturing output increased 0.9 percent led by widespread gains among durable goods industries...
But there was still plenty of slack in the labor market. Initial claims for state unemployment benefits rose 24,000 to a seasonally adjusted 484,000 last week. A Labor Department official attributed the spike to a backlog in applications from the Easter holiday and saw no unusual economic factors.
However, Europe remains plagued by concerns over Greece. From Bloomberg:
European Union finance ministers meet in Madrid today to discuss how to curb swelling budget deficits as Greece moved closer to asking for emergency aid to finance the region’s biggest shortfall.
Greek Prime Minister George Papandreou yesterday asked for a meeting with the EU, the International Monetary Fund and the European Central Bank, which agreed last week to back a 45 billion-euro ($61 billion) rescue package for the cash-strapped nation. Talks will begin in Athens on April 19...
The government’s request came after the yield on Greece’s benchmark 10-year government bond surged to 7.319 percent yesterday, higher than the level before the rescue package was announced on April 11. Papandreou said that the Athens talks didn’t mean Greece was activating the aid request and still planned to finance its debt in financial markets.