20120730 1114 Global Economy Related News.

South Korea: Manufacturer confidence drops to three-year low on Europe woes
South Korean manufacturers’ confidence dropped to the lowest level in more than three years as Europe’s worsening fiscal crisis damped sentiment in a country where exports make up about half the economy. An index measuring expectations for August was at 70, the lowest level since May 2009, after dropping from a revised 81 in July. A measure of expectations at non-manufacturing companies also dropped to 69 from a revised 76. Consumer confidence fell to a five-month low in July, the Bank of Korea said on 25 July. (Bloomberg)

EU: Spain jobless reaches post-Franco record amid austerity
Spanish unemployment rose to the highest on record after Prime Minister Mariano Rajoy made it easier to fire workers, while implementing the steepest budget cuts in the country’s recent democratic history. Unemployment, already the highest in the European Union, rose to 24.6% in the 2Q2012 from 24.4% in 1Q2012. More than 50% of under-25 year olds are already jobless in Spain and overall unemployment is as high as 33.9% in the southern region of Andalusia. (Bloomberg)

EU: German inflation unexpectedly held steady in July on oil prices
German inflation unexpectedly held steady in July after energy prices rose. Inflation, calculated using a harmonized European Union method, stayed at 2% in July while economists forecasted a decline to 1.9%. Consumer prices rose 0.4% m-o-m. Non-harmonized inflation remained at 1.7%, with prices rising 0.4% from June. (Bloomberg)

UK: Osborne urged to think again as triple-dip recession predicted
Chancellor of the Exchequer George Osborne was urged by businesses and his political opponents to reconsider the UK’s austerity strategy, as economists warned the nation could face a “triple-dip” recession. Osborne is facing renewed criticism after figures released last week showed Britain’s recession deepened in the second quarter, prompting questions about his economic plans and whether he should remain at the Treasury. GDP fell 0.7% from the first quarter, the third consecutive quarterly decline. Osborne said he will maintain the UK’s austerity program even as the economy remains weak after Standard & Poor’s reaffirmed the nation’s AAA credit rating. (Bloomberg)

US: Growth slows as consumers restrain spending
The world’s largest economy cooled in the second quarter as limited job growth prompted Americans to curb spending while state and local governments cut back. GDP, the value of all goods and services produced, rose at a 1.5% annual rate after a revised 2% gain in the prior quarter. Household purchases, which account for about 70% of GDP, grew at the slowest pace in a year. Household consumption rose at a 1.5% rate from April through June, down from a 2.4% gain in the prior quarter. Purchases added 1.05 ppt to growth. (Bloomberg)

Dow Jones posts another triple-digit gain
Stocks posted steep gains for a second day on Friday, reclaiming a weekly advance as investors anticipated moves from the European Central Bank and the US Federal Reserve. The Dow Jones Industrial Average ended up 187.73 pts or 1.5%, to close at 13,075.66 pts. It was its first close above 13,000 pts since 7 May while the Standard & Poor 500 gained 25.95 points or 1.9% to 1385.97. (Star Telegram)