Saturday, 29 September 2012

US consumer spending ekes out gain but Japanese industrial production falls

Global economic data on Friday were mixed.

In the US, consumer spending rose 0.5 percent in August. However, after accounting for a 0.4 percent increase in prices, real spending rose just 0.1 percent.

Incomes rose 0.1 percent in August, matching the previous month increase. After adjusting for inflation, disposable income fell 0.3 percent, the weakest reading since November.

However, consumer confidence has since improved. The Thomson Reuters/University of Michigan consumer sentiment index rose to 78.3 this month from 74.3 in August.

Manufacturing continued to show weakness though. Another report on Friday showed that the Institute for Supply Management-Chicago's business barometer fell to 49.7 in September from 53 in August.

Data from the euro area were also mixed.

German retail sales rose 0.3 percent in August. This followed a 1.0 percent drop in July.

French consumer spending on goods fell 0.8 percent in August after having increased 0.4 percent in July.

And inflation in the euro area accelerated to 2.7 percent in September from 2.6 percent in August. The increase was partly attributed to an increase in the value-added tax in Spain.

Meanwhile, over in Japan, deflation remains the problem. A report on Friday showed that the core consumer price index there fell 0.3 percent in the year to August as overall consumer prices fell 0.4 percent.

More alarmingly, industrial production fell 1.3 percent to a 15-month low in August, according to another report on Friday. Furthermore, a survey by the Ministry of Economy, Trade and Industry showed that output was expected to fall 2.9 percent in September and stabilise only in October.

In another possible sign of stabilisation, the Markit/JMMA Japan manufacturing PMI rose to 48.0 in September from 47.7 in August.

On a more positive note, another report showed that Japan's unemployment rate fell to 4.2 percent in August from 4.3 percent in July.

Also, household spending in Japan rose 1.8 percent in August from a year ago, improving from the 1.7 percent increase in July.

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