Friday 9 December 2011

Japan, China economies show signs of slowing

The economic reports out of Japan today and yesterday were quite negative.

Today, the government reported that it had revised down its estimate of third quarter GDP growth from 1.5 percent to 1.4 percent.

Growth could slow in the fourth quarter. Also today, a report showed that sentiment among manufacturers is deteriorating, the business survey index of sentiment at large manufacturers falling to minus 6.1 for the fourth quarter from 10.3 in the third quarter.

Yesterday's reports had also pointed to a slowing economy.

The current account surplus fell 62.4 percent from a year earlier in October, with the trade balance in deficit after exports fell 2.7 percent while imports surged 21.3 percent. Meanwhile, core machinery orders fell 6.9 percent in October.

The weakening economy is already affecting sentiment in the service sector. Another report yesterday from the economy watchers survey showed that the sentiment index for current conditions fell to 45.0 in November from 45.9 in October. The index for future conditions fell to 44.7 from 45.9.

In China, there have also been signs of a slowdown.

A report today showed that the inflation rate in China eased to 4.2 percent in November, well below the 5.5 percent recorded in October and the lowest rate since September 2010.

Another report today showed that industrial production rose 12.4 percent in November from a year earlier, slower than October's 13.2 percent rise. Urban fixed-asset investment rose 24.5 percent during the January-November period, down from 24.9 percent in the January-October period.

Retail sales, however, rose faster in November, increasing by 17.3 percent from the previous year, compared to a 17.2 increase rise in October.

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