Tuesday 2 July 2013

US economy shows signs of growth amid mixed data elsewhere

Economic data on Monday were mixed.

In the US, manufacturing activity grew in June. The Institute for Supply Management's manufacturing PMI rose to 50.9 from 49.0 in May.

Markit's US manufacturing PMI also indicated growth in June despite falling to 51.9 from 52.3 in May.

Another report from the US showed that construction spending rose 0.5 percent in May to its highest level in nearly four years.

In the euro area, the unemployment rate rose to a record high of 12.1 percent in May from 12.0 percent in April even as inflation accelerated to 1.6 percent in June from 1.4 percent in May.

However, in a sign that the eurozone recession may be near to an end, Markit's manufacturing PMI for the region rose to 48.8 in June from 48.3 in May.

Meanwhile, the UK economy showed further signs of recovery on Monday. The Markit/CIPS manufacturing PMI rose to 52.5 in June from 51.5 in May. Home loans rose to 58,242 in May, the most since 2009, from 54,354 in April.

Japan's economy is also showing positive momentum. The Bank of Japan's Tankan report on Monday showed that its index of sentiment among large manufacturers rose 12 points to four in the three months to June, the first time in nearly two years that it has been positive.

However, China provided further signs of a slowing economy on Monday. The HSBC manufacturing PMI fell to 48.2 in June from 49.2 in May while the official manufacturing PMI fell to 50.1 from 50.8.

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