Saturday, 29 January 2011

US economy accelerates, Japanese unemployment falls

Bloomberg reports that the US economy accelerated in the fourth quarter.

The U.S. economy accelerated in the fourth quarter of 2010 as consumer spending climbed by the most in more than four years.

Gross domestic product grew at a 3.2 percent annual rate, Commerce Department figures showed today in Washington, falling short of the 3.5 percent median forecast of 85 economists surveyed by Bloomberg News because of a slowdown in inventories. Excluding stockpiles, the economy rose at a 7.1 percent pace, the most since 1984...

Household purchases, about 70 percent of the economy, rose at a 4.4 percent pace last quarter, the most since the first three months of 2006. The increase added 3 percentage points to growth.

Consumer spending could yet continue to drive economic growth.

A separate report today showed consumer confidence fell less than expected in January, a signal the biggest part of the economy may extend the gains in spending.

The Thomson Reuters/University of Michigan final index of consumer sentiment decreased to 74.2 from 74.5 in December. The median forecast in a Bloomberg News survey called for a reading of 73.3, up from a preliminary figure of 72.7 issued earlier this month.

Earlier on Friday, Japan had released some mixed data on its economy. AFP/CNA reports:

Japan's consumer prices slid in December with the economy mired in deflation, but signs of a stronger job market gave some respite to a government under fire following the nation's credit downgrade.

The unemployment rate fell below 5.0 per cent for the first time in 10 months in December to 4.9 per cent, improving from 5.1 per cent the previous month and supporting the Bank of Japan's view that the nation is on a recovery path...

However, the country's reliance on exports to fuel growth was underlined by a 3.3 per cent plunge in household spending against forecasts of a 0.6 per cent drop, and a 2.0 per cent drop in retail sales, signalling weak domestic demand...

December's 0.4 per cent slide in consumer prices marked the 22nd straight monthly fall but also illustrated that the pace of decline was easing, lending support to the Bank of Japan's view that prices will rise next fiscal year.

The monthly figure was slightly better than market expectations of a 0.5 per cent fall according to a Dow Jones Newswires poll of analysts. Prices fell 0.5 per cent in November.

Even as these important economic reports were being released, however, investors were keeping an eye on developments in the Middle East. From Bloomberg:

Stocks worldwide plunged the most since November, crude oil posted the biggest jump since 2009 and the dollar rose versus the euro after protesters posed the biggest challenge to Egyptian President Hosni Mubarak’s 30-year rule. Egypt’s dollar bonds sank, pushing yields to a record.

The MSCI World All-Country World Index of stocks in 45 countries lost 1.4 percent at 4:59 p.m. New York time. The Dow Jones Industrial Average fell 1.4 percent to 11,823.70, preventing its longest weekly winning streak since 1995. Oil futures increased 4.3 percent to $89.34. The dollar appreciated 0.9 percent to $1.3611. Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51 percent. Gold futures jumped 1.7 percent, the most in 12 weeks.

Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to buildings. Mubarak imposed the curfew after tens of thousands of marchers chanted “liberty” and “change.” After U.S. markets closed, Mubarak said he asked the government to resign. The demonstrations offset data showing that growth in U.S. gross domestic product accelerated in the fourth quarter.

No comments:

Post a comment