US economic data on Friday were weak.
MarketWatch reports that pending home sales fell in April.
The National Association of Realtors' pending home sales index fell 11.6% to a reading of 81.9 in April, from a downwardly revised 92.6 in March. (March’s index initially was reported to be 94.1.)
MarketWatch also reports that consumer spending lost momentum in April.
Consumer spending rose by the smallest amount in three months during April, government data showed Friday, in a further sign of erosion in spending momentum due to higher prices at the gas pump.
Consumers’ spending rose 0.4% last month, the Commerce Department estimated.
Meanwhile, personal incomes rose 0.4% in April. Income has risen for seven straight months...
Adjusted after-tax incomes were flat in April for the second straight month, and spending increased 0.1% for the second straight month.
Adjusted for inflation, spending on durable goods and non-durable goods was flat in April. Spending on services rose 0.1%...
Consumer prices rose 0.3% in April, as measured by the personal consumption expenditure price index. Prices were 2.2% higher compared with a year ago, up from 1.8% in March...
Core consumer prices, which exclude volatile food and energy prices, rose 0.2% in April and are up 1.0% in the past year. This is up from a record-low 0.7% in December but still well within the Fed’s comfort zone.
The good news is that consumer sentiment improved in May. Again from MarketWatch:
A gauge of consumer sentiment rose in May as expectations improved, according to the Thomson Reuters/University of Michigan survey data released Friday.
The overall sentiment gauge increased to 74.3 in May from 69.8 in April. However, the gauge remains below a reading of 77.5 in February before prices for gasoline spiked.
Eurozone economic data on Friday were also weak. Bloomberg reports:
European confidence in the economic outlook weakened for a third straight month in May as the region’s worsening debt crisis and surging commodity costs clouded growth prospects.
An index of executive and consumer sentiment in the 17- member euro region slipped to 105.5 from 106.1 in April, the European Commission in Brussels said today. Economists had forecast a drop to 105.7, the median of 27 estimates in a Bloomberg survey showed.
There was some consolation in the euro area in the form of a drop in German inflation in May. From Bloomberg:
Inflation in Germany, Europe’s largest economy, unexpectedly eased in May after oil prices dropped from a 2 1/2-year high.
The harmonized inflation rate fell to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had expected inflation to hold at the highest level since September 2008, the median of 17 forecasts in a Bloomberg News survey showed. On the month, consumer prices declined 0.2 percent.
A fall in inflation would probably not have been welcomed in Japan. Thankfully, there was none, at least in April. From AFP/CNA:
Japan's core consumer prices rose for the first time in more than two years, mainly as a result of an increase in fuel prices, government data showed Friday.
The core consumer price index, which excludes volatile food prices, rose 0.6 percent in April from a year earlier, the first increase since December 2008.
And there were other encouraging signs on Friday for the Japanese economy. Reuters reports some stabilisation in retail sales in April.
Japanese retail sales fell 4.8 percent in April from a year earlier, but the pace of decline slowed from the previous month, government data showed on Friday, as worries about the impact from the March earthquake and tsunami started to ease.
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