Friday, 22 February 2013

Eurozone contraction worsens, US manufacturing slows

There were some disappointing economic data on Thursday.

In the euro area, the contraction in manufacturing and services worsened in February. Markit's composite index for the region fell to 47.3 this month from 48.6 in January, according to a preliminary reading. The manufacturing index slipped to 47.8 in February from 47.9 in January while the services index fell to 47.3 from 48.6, its steepest drop in 10 months.

In the US, Markit's preliminary manufacturing PMI fell to 55.2 this month from 55.8 in January. The Philadelphia Fed's business activity index fell to minus 12.5 in February from minus 5.8 in January. Initial claims for state unemployment benefits increased 20,000 to 362,000 last week.

On the bright side, US inflation remained tame -- consumer prices were flat for a second consecutive month in January -- and existing home sales rose 0.4 percent last month, pushing the supply of homes on the market to a 13-year low. The Conference Board's index of US leading indicators rose 0.2 percent in January.

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