Friday, 15 December 2006

Not so slow

Maybe the global economy isn't slowing down as much as initially thought.

After the somewhat upbeat data from the US over the past few days (see here and here), we have the following yesterday from Reuters:

The number of U.S. workers seeking initial jobless benefits fell 20,000 last week, while import prices rose last month despite an oil price drop, suggesting a resilient economy still facing inflation risks.

Adding to the picture of moderate but steady output, a snapshot of manufacturing in the Northeast, the New York Federal Reserve's "Empire State" general factory conditions index, slipped in December, but was higher than expected and showed gains in new orders and future business conditions measures.

And the picture of resilience appears to be corroborated by the recent news from the rest of the world.

On Tuesday, the ZEW reported that its index of German investor sentiment rose by 9.5 points in December -- the first rise since January -- to minus 19.0, the highest since August.

Yesterday, the Office for National Statistics said that the volume of retail sales in the UK rose by 0.3 per cent between October and November. The figure for October was revised higher to show an increase of 1 per cent.

Japan has had its share of good news too, including a 5.2 percent rise in its current account surplus to 1.51 trillion yen in October compared to the same month a year ago. And today we have news on the Tankan survey reported by Bloomberg.

The quarterly Tankan survey, Japan's most closely watched gauge of business sentiment, showed confidence among large manufacturers climbed to 25 points from 24 in September, the Bank of Japan said today in Tokyo. Companies plan to increase spending 12.4 percent in the year ended March 31, higher than the 11.5 percent increase they forecast in September.

Meanwhile, China, which on Tuesday reported that retail sales surged 14.1 percent in November from a year earlier and on Wednesday reported that industrial production rebounded to a growth rate of 14.9 percent in November from a year earlier after hitting a low of 14.7 percent in October, yesterday gave yet another indication of a possible stabilisation in the economy. From AFP/CNA:

Urban fixed-asset investment, a broad measure of spending on major infrastructure projects, rose 26.6 percent in the first 11 months to total 7.9 trillion yuan (one trillion dollars), the National Bureau of Statistics said.

While no official figure for the month of November alone was immediately available, analysts said the published data implied a rather abrupt acceleration from October.

Goldman Sachs said its calculations showed urban fixed-asset investment growth rebounded to 25 percent year-on-year in November, up from 16.8 percent in October. Other economists had similar conclusions.

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