Wednesday, 1 May 2013

Unemployment falls in Japan, hits record high in euro area

Tuesday's economic reports were mixed.

Japan reported that household spending jumped 5.2 percent in March from a year earlier, the biggest increase since February 2004. The unemployment rate fell to 4.1 percent in March, the lowest since November 2008.

Japanese industrial production rose 0.2 percent in March. Manufacturers surveyed by the government expect output to rise 0.8 percent in April but fall 0.3 percent in May.

The improvement in Japanese manufacturing is also reflected in the latest purchasing managers survey. The Markit/JMMA manufacturing PMI rose to 51.1 in April from 50.4 in March.

Data from Europe were less positive.

The unemployment rate in the euro area rose to a record high of 12.1 percent in March from 12.0 percent in the previous two months.

Meanwhile, inflation in euro area fell to 1.2 percent in April from 1.7 percent in March.

Spain's economy contracted 0.5 percent in the first quarter, the seventh consecutive quarterly contraction.

Even Germany has not avoided economic weakness as retail sales fell 0.3 percent in March. Encouragingly, though, the GfK consumer confidence index for May rose to 6.2, the highest in more than 5½ years, from 6.0 in April.

In contrast, GfK's consumer confidence index for the UK fell to -27 in April from -26 in March. On a more positive note, UK mortgage approvals rose to 53,504 in March from 51,947 in February.

In the US, both consumer confidence and housing provided positive data on Tuesday. The Conference Board's consumer confidence index jumped to 68.1 in April from 61.9 in March while the S&P/Case Shiller index of home prices in 20 cities rose 9.3 percent in February from a year earlier, the biggest increase in almost seven years.

However, the Institute for Supply Management-Chicago business barometer fell below the 50 mark to 49.0 in April from 52.4 in March.

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