Saturday July 21, 2012
US: Moderate growth
New home construction rose in June to the highest level in almost four years, indicating the residential real estate market is strengthening even as other parts of the economy cool. Housing starts rose 6.9% to a 760,000 annual pace after a revised 711,000 rate in May.
Industrial production increased in June, paced by gains among auto and machinery makers that may ease concern some of the drivers of the economic expansion were floundering. Output at factories, mines and utilities rose 0.4% last month after a revised 0.2% drop in May.
However, retail sales unexpectedly fell for a third month in June as limited employment gains took a toll on consumers. The 0.5% drop followed a 0.2% decrease in May.
Meanwhile, the cost of living was little changed in June, a sign inflation may stay subdued. No change in the consumer-price index followed a 0.3% drop in May. The so-called core measure that excludes volatile food and fuel costs rose 0.2% for a fourth month.
The Federal Reserve said the economy expanded at a “modest to moderate” pace in June and early July, as retail sales and manufacturing cooled in some regions. It said manufacturing activity continued to expand slowly in most districts, while employment levels improved at a tepid pace.
Europe: No better signs
German investor confidence declined for a third month in July as the euro area's debt crisis and cooling global demand dimmed the economic outlook. The ZEW Center for European Economic Research said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to -19.6 in July from -16.9 in the previous month.
Meanwhile, Italy's recession-hit economy shrank more than 0.5% in the three months through June amid the European debt crisis and declining domestic demand.
European inflation held steady last month and imports decreased in May as the euro-area economy edged toward its second recession in three years. The inflation rate in the 17-nation eurozone remained at 2.4%, the same as in May. Eurozone imports fell a seasonally adjusted 0.9% from April, while exports grew 0.3%.
China: Pessimism sets in
Premier Wen Jiabao said the country's labour situation would become more “severe”, underscoring concern that the weakest economic growth since 2009 will lead to increasing job losses. The government would continue to implement a more “proactive” labour policy to alleviate the job situation, which Wen said would become more “complex”.
Foreign direct investment in the country dropped 3% in the first six months from a year earlier to US$59.1bil. Europe's debt crisis, diminished prospects for gains in the yuan and a Chinese economic slowdown may be limiting foreign investment inflow.
Meanwhile, new home prices in June rose in the most number of cities tracked by the government in 11 months as buyer sentiment improved after the central bank cut interest rates. Prices climbed in 25 cities out of the 70 the government looks at, the most since July last year, while prices fell in 21 from a month earlier. The eastern city of Hangzhou led the gain with a 0.6% jump from May, while major cities Beijing and Shanghai recorded gains of as much as 0.3%. Home prices were unchanged from May in 24 cities.
Singapore: Higher exports
Exports growth unexpectedly quickened in June as pharmaceutical shipments rebounded, countering a smaller increase in electronics sales. Non-oil domestic exports climbed 6.8% from a year earlier, after a 3.2% gain in May.