20100521 1034 Global Economic News.

US initial jobless claims rose by 25,000 to 471,000 in the week ended May 15, exceeding the median forecast of 440,000 and the highest level in a month. Some companies are trimming payrolls to boost or maintain profits, even as employers have added jobs each month this year. The four-week moving average, a less volatile measure than the weekly figures, climbed to 453,500 last week from 450,500, today’s report showed. (Bloomberg)

US leading economic indicators unexpectedly declined 0.1% in April (1.3% in Mar), a sign that the economic expansion may slow in the second half of the year. It was the first decline for the index in a year. Economists had expected a 0.2% increase. The drop in index reflects a decline in building permits and shortening delivery times.

• Unemployment claims also weighed on the index. Consumer confidence was also a negative and, given the turmoil in Europe and losses in the U.S. stock market, may also be a negative for May. But the Conference Board is upbeat saying the recovery will continue though it may slow through the summer. (Bloomberg)

Manufacturing activity shows steady strong growth in May according to the Philadelphia Fed's general business conditions index which came in at 21.4, a reading well above zero to indicate significant month-to-month growth and a reading very near April's 20.2 to indicate a similar pace of growth. Economists had expected the index to rose to 21.5. (Bloomberg)

Wall Street reform cleared a crucial test vote on Thursday, all but assuring final Senate passage of the most sweeping regulatory overhaul since the New Deal. The Senate voted 60 to 40 to meet the threshold to overcome filibusters and send the measure to a final vote within days.

• "Today, Democrats and a handful of Republicans in the Senate have voted to break the filibuster and allow the final debate and vote on financial reform -- reform that will protect consumers, protect our economy and hold Wall Street accountable," President Obama said Thursday. (CNNMoney)

US Congress previewed a grab-bag bill of spending and tax measures that are likely to be a flash point in the debate over the federal debt. The legislation would extend a host of tax breaks, give continued relief to the unemployed, delay cuts to doctors' Medicare reimbursements, provide support for job growth and fund disaster relief, among other things. Congress' budget scorekeepers haven't finished estimating the total cost of the bill and the amount of revenue it would raise through pay-for measures. But the payfors are not likely to cover even half of the total cost, which could top US$150bn. (CNNMoney)

Japan’s GDP growth rose an annualized 4.9% in 1Q10 (4.2% in 4Q09), less than the 5.5% market forecast. Export gained 1.2%. Consumer spending contributed only 17% to the quarterly growth rate. Business spending gained 1% in 1Q (1.3% in 4Q09). Housing investment climbed 0.3 percent, the first increase in five quarters. (Bloomberg)

Taiwan’s GDP rose 13.27% yoy in 1Q10, the most since 1978 and more than the median estimate for a 11% gain, the statistics bureau said. The statistics bureau raised its 2010 GDP growth projection to 6.14% from 4.72%, and its annual inflation forecast to 1.4% from 1.27%. The Central Bank of the Republic of China (Taiwan) has kept its benchmark interest rate at 1.25% since March last year to help extract the island from its deepest recession on record. (Bloomberg)

Dubai World, the state-owned holding company, reached an agreement with creditors to restructure US$23.5bn of liabilities as it seeks to resolve a debt crisis that roiled global markets last year. Dubai World will pay US$4.4bn of the loans in five years and the remaining US$10bn over eight years, the company said in an e-mailed statement today. Dubai’s government, which pledged US$1.5bn in March for the restructuring, will convert US$8.9bn of its loans to Dubai World into equity. (Bloomberg)

India’s central bank signaled it may raise interest rates in a measured manner as Europe’s debt crisis outweighs inflation concerns. Global economic conditions have changed in the past six weeks and a “cautious pace is the best way to go and that is the stance,” Subir Gokarn, the deputy governor in charge of monetary policy at the Reserve Bank of India told reporters in Thiruvananthapuram, India, yesterday. (Bloomberg)

European consumer confidence declined to -17.5 in May (-15.0 in Apr), the most in 17 months on concerns austerity measures to fight the debt crisis will hurt economic growth. (Bloomberg)

UK retail sales rose 0.3% mom in April (0.5% in Mar), marking the third month incarese as the economic recovery encouraged consumers to spend more at clothing shops and department stores. Economists predicted a 0.2% gain. Excluding fuel, sales rose 0.1%. (Bloomberg)

Taiwan’s export orders rose 43.7% yoy in March (36.3% in Feb), faster than economists expected as the global economic recovery boosted demand for computers and mobile phones. Economists had projected for a 40.1% advance. (Bloomberg)

Singapore’s government said the economy expanded faster than initially estimated last quarter and raised its forecast for export growth, judging that Asian demand will make up for any slowing of European sales. Gross domestic product grew an annualized 38.6% qoq in 1Q, compared with an April estimate of 32.1% and economists’ forecast for a 33.4% increase.

• On a yoy basis, the economy grew 15.5% in 1Q (vs. April estimate of 13.1% expansion and market consensus for a 13.7% gain). 
• Singapore’s non-oil domestic exports will probably gain 15.0-17.0% in 2010, from a previous projection of as much as 12.0%, the trade promotion agency said. (Bloomberg)

Deputy Managing Director at the Monetary Authority of Singapore, Ong Chong Tee, indicated the government will use administrative rather than broad measures to curb runaway property prices. “It is much better not to use monetary policy, which is a blunt instrument, but to use much more targeted, preventive, administrative or even fiscal measures to address this,” he noted. (Financial Daily)

Indonesia’s budget deficit in 2011 may be 1.7% of GDP, outgoing Finance Minister Sri Mulyani Indrawati said. Inflation next year may reach 4.9-5.3%. Economic growth may be 6.2-6.4%. (Bloomberg)

India’s food inflation accelerated 16.5% yoy in the week ended 8 May (16.4% in the previous week) as the finance ministry said pressure on prices from a shortage of farm products will recede this year. Food prices may decline as sufficient monsoon rains this year boosts rice, wheat and sugar output,

• Finance Minister Pranab Mukherjee said last week. Even so, rising consumer demand may stoke inflation, the central bank said yesterday, while signaling a “cautious” approach to raising interest rates given the risks posed by Europe. (Bloomberg)