Saturday, 14 July 2007

US retail sales fall but euro economy looks strong

Is US consumer spending weakening? June retail sales data released yesterday say yes but consumer sentiment actually picked up in early July. Bloomberg reports:

American shoppers took a breather last month as the worst housing recession in 16 years eroded demand for building materials, appliances and furniture.

The 0.9 percent drop in retail sales, the most in almost two years, followed a revised 1.5 percent increase in May, the Commerce Department said today in Washington. Sales excluding automobiles fell 0.4 percent, the most since September. A separate Labor Department number showed the price of imported goods rose for a fifth month on higher fuel costs.

Another report showed confidence among Americans rose more than expected this month, indicating the drop in sales may be temporary...

The Reuters/University of Michigan's preliminary index of consumer sentiment rose to 92.4 this month from 85.3 in June, which was the lowest in 10 months. The reading compares with an average of 88.6 in the 12 months through June.

The 1.0 percent increase in the import price index, which was bigger than forecast, followed a 1.1 percent gain in May, the Labor Department reported today in Washington. Prices excluding petroleum rose 0.2 percent after climbing 0.5 percent.

In contrast, the data from Europe the previous day had been strong. Bloomberg reports:

Europe's economy grew faster than previously estimated in the first quarter and is set to sustain its momentum through the year, European Union reports showed.

The economy of the 13 nations that share the euro expanded 0.7 percent from the fourth quarter, when it grew 0.9 percent, Eurostat, the EU's Luxembourg-based statistics office, said today. That compares with the 0.6 percent growth estimated last month...

The European Commission estimates growth of 0.7 percent in the second and third quarters, according to forecasts published on its Web site today. GDP will probably expand 0.6 percent in fourth quarter, up from a previous forecast of 0.5 percent...

Industrial production rose 0.9 percent in May, the most in five months, after falling 0.7 percent in April, according to a separate report today. From a year earlier, production rose 2.5 percent.

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