The global economy continues to grow nicely.
In the US, consumer spending cooled in January but incomes jumped. Bloomberg reports:
Consumer spending cooled more than forecast in January as rising food and fuel prices caused Americans to cut back on post-holiday visits to malls and restaurants.
Purchases rose 0.2 percent, the smallest gain since June, as winter storms may have also discouraged shoppers, according to figures from the Commerce Department today in Washington...
The spending report showed incomes climbed 1 percent in January, exceeding the median forecast of economists surveyed and the most since May 2009. The jump reflected the tax-cut compromise reached by President Barack Obama and Congressional Republicans in December that reduced the social security payroll tax by 2 percentage points this year.
Disposable incomes, or the money left after taxes, rose 0.7 percent in January, the most since April. Excluding the benefits of the tax changes, the increase would have been 0.1 percent, the Commerce Department said.
Meanwhile, manufacturing continues to do well.
The Institute for Supply Management-Chicago Inc. said today its business barometer rose to 71.2 this month, the highest level since July 1988, from 68.8 in January. Figures greater than 50 signal expansion. The gauge, which was projected to fall, exceeded every estimate of economists surveyed by Bloomberg News.
Housing continues to be the underperformer though.
Another report today showed the index of pending home resales fell 2.8 percent after a revised 3.2 percent decrease the prior month that was initially reported as a gain, according to figures from the National Association of Realtors.
Still, deflation has become a vanishing concern.
Today’s report also showed inflation stabilized. The gauge tied to spending patterns increased 1.2 percent from January 2010, the same as in the 12 months to December.
The Federal Reserve’s preferred price measure, which excludes food and fuel, rose 0.1 percent from the prior month and was up 0.8 percent from a year earlier, matching December’s year-over-year gain.
Indeed, in Europe, inflation is accelerating. Bloomberg reports:
European inflation accelerated less than initially estimated in January, as increases in food and transport prices eased from the previous month.
Inflation in the 17-nation euro region quickened to 2.3 percent from 2.2 percent in December, the European Union’s statistics office in Luxembourg said today. While that’s below the initial estimate of 2.4 percent published on Jan. 31, the January reading is still the fastest since October 2008.
Also accelerating recently is Canadian economic growth. Bloomberg reports:
Canada’s economy accelerated more than forecast from October to December on the biggest jump in exports since 2004 and faster consumer spending.
Gross domestic product in the world’s 10th-largest economy expanded at a 3.3 percent annual pace in the fourth quarter following a 1.8 percent expansion in the previous three months that was higher than initially estimated, Statistics Canada said today in Ottawa. Economists predicted a 3 percent fourth-quarter gain, according to the median of 23 estimates gathered by Bloomberg News.
Meanwhile, India's fourth quarter growth rate remains impressive despite decelerating from the previous quarter. AFP/CNA reports:
India's economy grew 8.2 per cent on an annual basis in the last quarter of 2010, driven by expansion in the farm and financial service sectors, official data showed on Monday.
Growth in gross domestic product in the October-December period was lower than the 8.9 per cent reading in the previous quarter, data from the Central Statistical Organisation showed.
There were also signs of improvements from Japan today. AFP/CNA reports:
Japan's unemployment rate stood at 4.9 per cent in January, unchanged from a month earlier in line with market forecasts, government data showed Tuesday.
The number of people out of work stood at 3.09 million, down 140,000 from a year earlier, in the eighth straight month of year-on-year decline, the official data showed.
Separate data showed job availability had improved from the previous month, with 61 positions available for every 100 job seekers, the health, labour and welfare ministry said...
But the country's reliance on exports to fuel growth was underlined by a 1.0 per cent fall in January's household spending, the fourth consecutive month of decline after a 3.3 per cent dip in December, signalling weak domestic demand.