Calculated Risk looks at the US Census Bureau's April report on retail sales:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $344.9 billion, an increase of 1.4 percent (±0.7%) from the previous month and up 8.6 percent (±0.8%) from April 2004. Total sales for the February through April 2005 period were up 7.5 percent (±0.5%) from the same period a year ago. The February to March 2005 percent change was revised from +0.3 percent (±0.7%)* to +0.4 percent (±0.3%).
...and Wal-Mart's first quarter report:
Wal-Mart Stores Inc. reported a 14 percent increase in first-quarter earnings Thursday, but the results missed Wall Street estimates. The world's largest retailer also warned that second-quarter results could be much lower than analysts expected as unseasonably cool weather and higher gasoline prices continue to hurt business.
...and asks: "What is wrong with this picture?"
There are more questions to ask about the economy when you read about the rise in jobless claims in the US:
Initial jobless claims unexpectedly rose by a seasonally adjusted 4,000 to 340,000 last week, the U.S. Labor Department announced Thursday. This was reported to be the highest level of claims since the week ended April 2... The four-week moving average was 324,000, an increase of 2,000 from the previous week's revised average of 322,000.
...and the gloomy outlook in Europe:
Better than expected figures showed that the German economy, Europe's biggest, expanded by 1 per cent over the first three months of this year, in its best quarterly performance for four years.
The sudden German revival, after a 0.1 per cent decline in the previous quarter, boosted economic activity across the eurozone, with a first quarter expansion for the 12-nation bloc of 0.5 per cent, up from 0.3 per cent in the three months before.
But economists said that this was likely to prove "as good as it gets" for the eurozone, with Germany’s resurgence driven entirely by exports and likely to run out of steam.
Pessimism over the outlook was deepened by the news from Italy and the Netherlands. In Italy much worse than forecast data showed the economy shrank by 0.5 per cent in the first quarter. After a 0.4 per cent decline in the final quarter of last year, this left Italy in the grip of a technical recession. The Netherlands suffered the same fate, with its GDP falling by 0.1 per cent in the first quarter, after stagnating in the previous one.
[...]
The Organisation for Economic Co-operation and Development said that its monthly indicator of world prospects fell in March in all seven leading industrial economies.
...while things are little better in Japan (also highlighted by Calculated Risk):
Japan's index of leading economic indicators was below 50 percent in March for a second month, suggesting that the country's economic growth may stall, the Cabinet Office said Wednesday. The index, which measures indicators such as job offers and consumer confidence, rose to 30 percent from 18.2 percent in February, the Cabinet Office said.
Even China may not be immune to a slowdown, after a reported fall in foreign investment:
China attracted $4.08 billion in foreign direct investment in April, down 27 percent on a year before, in what some said could be dampened interest in the world's seventh-biggest economy. For the first four months, foreign direct investment was $17.47 billion, just 2.24 percent higher [than] a year earlier and showing a marked slowdown from the 14 percent growth seen in 2004's full-year figures...
Separate figures for deals that had been signed but not yet executed showed investment of $14.9 billion in April, higher than the $12.3 billion seen in the same month last year, official data showed on Thursday. Such "contracted" FDI for the first four months was $50.15 billion, the Commerce Ministry said on its Web site (http://www.mofcom.gov.cn).
This comes in the wake of new measures by the Chinese government to cool excessive investment, for examples, in steel:
China will start to ban iron and steel processing trade on May 19, the Ministry of Commerce said yesterday. The measure means that processors in China will be prohibited from making goods for overseas clients with imported iron ore, pig iron, steel scraps, billets or ingots provided by overseas clients.
...and property:
The Chinese government has moved to impose new taxes and restrictions on property transactions in what appeared to be its strongest attempt yet to prevent a property bubble from developing in China's biggest cities...
[T]he government said Wednesday that beginning June 1 it would impose a nationwide tax on all properties sold within two years of being purchased and occupied... The government also said that it would impose a tax on land that was not developed within a year of being acquired and that it would revoke land-use rights if nothing is built on a parcel of land more than two years after those rights were acquired.
Morgan Stanley's Andy Xie has said that "the party doesn't end until property prices fall". So is this the beginning of the end?
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