Friday, 3 June 2011

US data weak, Europe to rescue Greece

US economic data on Thursday were again weak. Reuters reports:

The number of Americans signing up for jobless benefits fell only slightly last week, doing little to calm growing fears of a pullback in the economy's recovery.

Initial claims for state jobless benefits slipped 6,000 to 422,000, the Labor Department said on Thursday, which was higher than the 415,000 claims expected by economists...

In another troubling sign, a survey of 733 small businesses released on Thursday showed their hiring stalled in May. The National Federation of Independent Business said its survey found that the average number of net new jobs slipped to 0.01 per firm from 0.04 in April...

Productivity grew at a 1.8 percent annual rate in the first quarter, the department said. While that was up from the previously reported 1.6 percent pace, it was well below the 2.9 percent pace set in the fourth quarter...

The economy's slowing pace was underscored by a third government report showing orders received by U.S. factories fell 1.2 percent in April.

But Europe's sovereign debt concerns continued to recede on Thursday. Reuters reports that eurozone officials are ready to rescue Greece again.

Greece is set to impose a deeper bout of austerity on its struggling economy and promise to speed up a privatization drive in return for a new international bailout to avoid a debt default.

Prime Minister George Papandreou Friday will present his side of the deal, a medium-term budget plan, when he meets the chairman of euro zone finance ministers -- the people who must stump up much of the planned new funding along with the IMF.

Senior euro zone officials meeting in Vienna agreed in principle to a new three-year program for Greece to run until mid-2014, a source close to the negotiations said.

And Spain continued to distinguish itself from the worst-hit countries. From Bloomberg:

Spain sold 4 billion euros ($5.8 billion) of bonds, meeting the maximum target the Treasury set for the sale and sending the nation's bonds higher.

The Treasury in Madrid said it sold 2.75 billion euros of three-year bonds at an average yield of 4.037 percent, compared with 3.568 percent the last time the securities were auctioned on April 7 and 4.118 percent on the secondary market before the sale. It also sold 1.2 billion euros of four-year debt at an average yield of 4.23 percent.

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