First quarter sees rebound in economic growth

Last week's economic data showed rebounds in growth for the United States and the United Kingdom in the first quarter.

In the UK, real gross domestic product grew 0.3 percent in the first quarter, reversing the 0.3 percent decline in the previous quarter.

In the US, the economy grew at an annualised rate of 2.5 percent in the first quarter, rebounding after growth had slowed to a 0.4 percent rate in the final quarter of last year.

Other reports from the US last week indicated that growth has probably weakened since the first quarter though.

Durable goods orders fell 5.7 percent in March, more than reversing the 4.3 percent increase in February.

Further indication of weaker growth in US manufacturing came from Markit's purchasing managers survey. The flash reading of the manufacturing index for April came in at 52.0, down from 54.6 in March.

US consumer spending may also weaken. While the GDP report showed a rebound in consumer spending growth to 3.2 percent in the first quarter from 1.8 percent in the previous quarter, the Thomson Reuters/University of Michigan index of consumer sentiment declined to 76.4 in April from 78.6 in March.

US housing data last week were mixed. Existing home sales fell 0.6 percent but new home sales, a leading indicator of the economy, rose 1.5 percent in March.

Elsewhere in the world, economic data from the euro area last week mostly indicated weakness.

Markit's flash composite index for the euro area based on purchasing managers surveys came in at 46.5 in April, unchanged from March. The services index rose to 46.6 in April from 46.4 in March but the manufacturing index fell to 46.5 from 46.8.

In Germany, the euro area's biggest economy, the Ifo business climate index fell to 104.4 in April from 106.7 in March.

Consumer confidence in the euro area did improve to -22.3 in April from -23.5 in March though.

Meanwhile, China's economy may also be slowing.

Data over the weekend showed that profits from industrial companies in China grew 5.3 percent in March from a year earlier, down from 17.2 percent growth in the first two months.

Earlier last week, a flash reading of HSBC's manufacturing index for China came in at 50.5 in April, down from 51.6 in March.