Just a reminder that the Japanese economy was recovering before the earthquake struck. From Bloomberg on Tuesday:
Japan’s unemployment rate fell in February and retail sales beat analysts’ forecasts, signs that the economy was picking up before the March 11 earthquake and tsunami that devastated northeastern regions.
The jobless rate unexpectedly slid to 4.6 percent from the previous month’s 4.9 percent, the statistics bureau said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for the rate to be unchanged. Retail sales rose 0.1 percent from a year earlier, beating forecasts for a 0.5 percent drop, the Trade Ministry said in a separate report...
Household spending fell 0.2 percent after a 1 percent decline in January, the statistics bureau said. The job-to- applicant ratio rose to 0.62, indicating there were 62 positions for every 100 candidates in February, the highest since January 2009, the Labor Ministry said.
Tuesday also brought some evidence that the UK economy is recovering from a fourth quarter contraction. From Bloomberg:
U.K. mortgage approvals rose to 46,967 in February, the highest level since November and more than economists forecast, suggesting the property market is stabilizing.
The figure compares with an upwardly revised 46,152 in January, the Bank of England said today in London. Economists forecast 46,000, based on the median forecast of 15 economists in Bloomberg News survey...
Separate figures showed the economy shrank 0.5 percent in the fourth quarter, less than previously estimated, as services and factory output was revised higher. Excluding the impact of the coldest December in a century, growth was “broadly flat,” the Office for National Statistics said today in London.
However, US economic data continued on its recent weak trend. Again from Bloomberg:
Confidence among U.S. consumers dropped more than forecast in March as fuel costs surged to the highest level in more than two years.
The Conference Board’s confidence index fell to a three- month low of 63.4 from a revised 72 reading in February, figures from the New York-based private research group showed today...
Another report today showed home prices fell in January by the most in a year, raising the risk that home sales will keep slowing. The S&P/Case-Shiller index of property values in 20 cities dropped 3.1 percent from January 2010, the biggest year- over-year decrease since December 2009.
Home prices fell 0.2 percent in January from the prior month after adjusting for seasonal variations, following a 0.4 percent December decrease.
Continuing a somewhat longer trend are yet more sovereign credit rating downgrades. Bloomberg reports:
Portugal and Greece were downgraded by Standard & Poor’s, which said the European Union’s new bailout rules may mean that both nations eventually renege on their debt obligations.
S&P cut Portugal for the second time in a week to the lowest investment-grade rating of BBB-, three steps below Ireland. Greece’s rating fell two grades to BB-, three levels below investment grade. S&P cited concerns that both countries may be forced to restructure debt after seeking European aid and that governments will be paid back before other creditors...
The gap between Portuguese and German borrowing costs surged to 467 basis points today, the highest intraday level since Nov. 11. The Greek spread widened to 938 basis points from 934 basis points yesterday.