Friday, March 5, 2010

20100305 0929 Global Economic News.

Overall US factory orders increased by 1.7% in January (+1.5% in Dec), much of it driven by volatile aircraft orders. Analysts expected orders to rise 1.8%. Excluding transportation, orders edged up just 0.1%, the slowest gain in six months. New orders for capital equipment orders fell 4.1% after two months of strong gains, suggesting the fourth quarter surge reflected expiring business investment tax credits. Inventories increased 0.2% (- 0.2% in Dec) and the inventories-to-shipment ratio was 1.29, unchanged from December. (Xinhua)

US initial jobless claims fell 29,000 to 469,000 in the week of February 27. This marks the lowest level since Jan. 9. A consensus estimate of economists expected new claims to drop to 470,000. The 4-week moving average of initial claims was 470,750, down 3,500 from the previous week's revised average of 474,250. In the February 20 week, continuing claims declined by 134,000 to 4.500m. (CNN Money)

US non-farm unit productivity was revised up to a 6.9% (from 6.2% initially reported) annual rate in 4Q09, while unit labor costs were revised down to a 5.9% (from -4.4%) rate of decline. (Xinhua)

US same store sales, or sales at stores open at lease a year, jumped 4% in February. Many of the nation's top retail chains reported much stronger-than-expected February sales furthering hopes that US consumers are starting to loosen their purse strings. February marked the sixth month in a row that overall same-store sales increased and was the strongest gain since November 2007, when those sales rose 6%. (CNN Money)

US pending home sales dropped 7.6% in January (+0.8% in Dec), the National Association of Realtors announced. The drop in contract signings adds to evidence the housing market at the center of the worst recession since the 1930s is struggling to rebound after reports last week showed unexpected declines in purchases of new and existing homes. (Bloomberg)

The US House approved a US$18bn job-creation bill that aims to help create jobs by offering a temporary tax break to companies that hire people who have been out of work at least 60 days. The Congressional Budget Office has estimated that the payroll-tax break would save or create up to 234,000 jobs. The plan would also provide US$4.5bn to help state and local governments issue bonds to pay for construction projects. (Bloomberg)

The European Central Bank (ECB) left its benchmark interest rate at a record low of 1.0% as policy makers weigh the risks of withdrawing emergency lending measures amid Greece’s fiscal crisis. The decision came largely expected. (Bloomberg)

Europe’s recovery almost came to a halt in 4Q09 as companies continued to cut investment while consumers held back spending, countering a gain in exports. Gross domestic product (GDP) rose 0.1% qoq (0.1% in 3Q09). Corporate investment dropped 0.8% qoq (0.9% in 3Q09) while household spending was flat (-0.2% in 3Q09). Exports gained 1.7% qoq and imports rose 0.9% qoq. (Bloomberg)

The European Central Bank (ECB) said its offerings of three-month cash will return to variable interest rates on 28 Apr. “Amounts will be set with the aim of ensuring smooth conditions in money markets” and avoiding “significant spreads” between the ECB’s benchmark rate and the rate at which money is allotted, President Jean-Claude Trichet said. The benchmark rate serves as the minimum bid rate. (Bloomberg)

The Bank of England (BoE) kept its bond-purchase program on hold for a second month as policy makers assessed whether the £200bn spent so far is enough to prevent a relapse in the economy. This decision was widely predicted by economists. The bank also kept the benchmark interest rate at a record low of 0.5%. (Bloomberg)

Chinese Premier Wen Jiabao will unveil a plan at today’s annual meeting of the National People’s Congress to sell RMB200bn (US$29bn) of bonds for a second year to help local governments fund infrastructure projects. (Bloomberg)

China’s central bank can prevent inflation from spinning out of control this year and is also confident of containing inflation expectations, Su Ning, a deputy governor of the People’s Bank of China (PBOC) said. “From the measures we have taken, I feel we can control inflation at a reasonable level this year. Just as we successfully managed deflationary pressure last year,” he said. (Financial Daily)

Japanese businesses cut spending for an 11th quarter even as their earnings rebounded. Capital spending excluding software fell 18.5% yoy in the three months ended Dec. 31. Based on today’s data, the Cabinet Office may revise fourth-quarter economic growth figures lower on March 11. (Bloomberg)

Hong Kong’s retail sales rose 6.6% yoy to HK$29.3bn in January (16.1% in Dec 09), marking the fifth monthly increase as more tourists visited the city. That was less than the median 10.1% estimate. The numbers may have been distorted by the timing of a Lunar New Year holiday, which fell in Jan 09 and February this year. (Bloomberg)

Indonesia’s central bank kept its benchmark interest rate unchanged at 6.5% for a seventh straight month. It was the lowest level since the measure was introduced in July 05. The move was predicted by all economists. (Bloomberg)

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