The US president has proposed a plan to cut the budget deficit. Bloomberg reports:
President Barack Obama vowed to cut $4 trillion in cumulative deficits within 12 years through a combination of spending cuts and tax increases, setting the stage for a fight with congressional Republicans over the nation’s priorities.
In presenting his long-term plan for closing the federal budget shortfall, Obama set a target of reducing the annual U.S. deficit to 2.5 percent of gross domestic product by 2015, compared with 10.9 percent of GDP projected for this year. He reiterated his support for overhauling the tax code to lower rates while closing loopholes and ending some breaks to increase revenue.
This comes as another Bloomberg report shows the US economy continuing to improve.
Sales at U.S. retailers rose in March for a ninth consecutive month, easing concern that the jump in food and fuel costs would cause consumers to retrench.
Purchases increased 0.4 percent following a 1.1 percent February gain that was larger than previously estimated, Commerce Department figures showed today in Washington...
The Federal Reserve said the economy grew at a “moderate” pace in February and March, with the job market showing improvement in most regions.
“While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors,” the central bank said in its Beige Book report...
Job openings rose by 352,000 in February, the biggest gain since December 2004, the Labor Department said today. At 3.09 million, the number of positions waiting to be filled was the highest since September 2008.
Another report from the Commerce Department also showed inventories rose 0.5 percent in February after a revised 1 percent gain in January that was larger than initially estimated. The amount of goods on hand at retailers compared to sales dropped to the lowest level on record, indicating merchants will be placing more orders to rebuild stocks, contributing to growth and helping keep manufacturing as the expansion’s frontrunner.
The UK economy is also showing signs of improvement, with Reuters reporting a fall in the jobless rate.
The rate of unemployment fell unexpectedly in the three months to February, and employment rose, official data showed on Wednesday, in a sign that companies are feeling more confident about hiring...
The Office for National Statistics said the number of people without a job on the broad ILO measure fell by 17,000 in the three months to February to 2.480 million. That took the jobless rate down to 7.8 percent, below forecasts for a reading of 8.0 percent. It was the first fall in the jobless level and rate since last September.
In a further sign of improvement in the labour market, the number of people in employment rose by 143,000 in the three months to February -- the biggest increase since the three months to September 2010.
Another Reuters report showed that consumer confidence improved in March.
Consumer confidence recovered only somewhat in March from the record low hit in the previous month, a survey showed, providing little relief for retailers suffering from consumers' reluctance to spend.
Nationwide Building Society's consumer confidence index rose to 44 from 39 in February, the group said on Thursday. The February number was revised up 1 point, but it was still the lowest in the survey's history.
Meanwhile, in the euro area, Bloomberg reports that industrial production accelerated in February.
European industrial production growth accelerated in February, led by demand for intermediate and capital goods, indicating that the economy is gathering strength.
Production in the 17-member euro area rose for a fifth straight month, increasing 0.4 percent from January, when it advanced 0.2 percent, the European Union’s statistics office in Luxembourg said today. Economists forecast a gain of 0.8 percent, the median of 34 estimates in a Bloomberg News survey showed. Production jumped 7.3 from February 2010.
The economic outlook is less positive for Japan, though. From AFP/CNA:
Japan cut its assessment of the economy for the first time in six months after the devastating March 11 earthquake and tsunami and the resulting nuclear crisis, it said Wednesday.
The move came after the Bank of Japan last week downgraded its view of an economy ravaged by the quake and the monster wave it unleashed, which destroyed entire towns and left more than 28,000 dead or missing.
"The economy was picking up, but it has shown weak signs recently due to the impact of the Great East Japan Earthquake," the Cabinet Office said in its monthly economic assessment. "It remains in a severe condition."
Elsewhere in Asia, though, the party goes on, not least in Hong Kong, where property prices are at a new high. AFP/CNA reports:
Hong Kong's financial chief said Wednesday that overall property prices had passed their 1997 peak in February and would look at introducing more measures to cool the city's red-hot market.
John Tsang's comments to lawmakers came as he outlined plans to boost land supply in the city in response to rising public anger over soaring house prices, which have become a major headache for officials...
Luxury home prices topped their pre-Asian crisis peak in October, official data showed last year. Average luxury home prices in August were HK$142,249 ($18,300) per square metre, compared with around HK$122,500 before the 1997 crisis.
He added that property prices had increased 7.2 percent in the first two months of this year.
Tsang said the rise was caused by low interest rates, despite the fact that speculation, a major driver of prices previously, had slowed down.
And in South America, Chile's central bank has seen the need to raise interest rates again. From Bloomberg:
Chilean policy makers raised the benchmark interest rate by a half-point for the second straight month today as economic growth accelerates and consumer prices threaten to exceed central bank targets this year.
The five-member policy board, led by bank President Jose De Gregorio, raised the overnight rate by a half-point to 4.5 percent, matching the forecast of 19 of 21 economists surveyed by Bloomberg. Two analysts forecast that the central bank would raise rates by a quarter-point to 4.25 percent. It was the tenth rate increase in 11 months for the South American country.
Chile hastened the pace of rate increases in March to contain the effect of energy price gains on inflation forecasts. Policy makers today sustained that tempo as inflation surpasses the mid-point of the bank’s target and the economy accelerates toward what could be its fastest annual pace in more than a decade.
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