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US: Fall in durable orders points to US recession
Thu, Mar 27 2008, 09:11 GMT
by KBC Market Research Desk
In February, durable goods orders unexpectedly fell 1.7% M/M following a slight upwardly revised drop of 4.7% M/M in the previous month. Excluding the volatile transportation orders, durable orders even fell 2.6% M/M. The decline was led by the largest drop on record in machinery orders (-13.3% M/M). Shipments of nondefence capital goods excl. aircraft, a proxy for business investments, fell for the second consecutive month (-2.1% M/M). This all appears consistent with an economy entering recession (in Q1).
The number of new home sales slowed further in February to 590K from 601K in January. The outcome was slightly better than expected as the January results were revised higher, but the number of months needed to sell all new homes remains at a very high 9.8, which suggests that house prices will remain under downside pressure for now.
EMU: Business confidence keeps up surprisingly well
In March, the German IFO once again surprised friend and foe, as business confidence improved for the third consecutive month. The increase in the general business climate from 104.1 in February to 104.8 in March was mainly due to the current assessment, but also the expectations for the coming six months brightened somewhat. As such, businesses are currently as optimistic as at the start of the financial crisis in August. The improvement was broadly based over the manufacturing, construction and wholesale sectors, while in retailing there was a slight deterioration following the strong rise in February. Outside Germany, business confidence also improved substantially in France and Belgium from respectively 107 and 0.2 in February to 109 and 1.2 in March. In Italy, there was however a slight deterioration from 89.6 to and 89.0. This raises fears that the Italian economy is entering recessionary territory. The divergent trends within the EMU won’t make it any easier for the ECB.
Published on Thu, Mar 27 2008, 09:15 GMT
Archive
- EMU: Retail sales continue to disappoint
Published On Thu, May 8 2008, 07:41 GMT - EMU: PMI results confirmed
Published On Wed, May 7 2008, 07:33 GMT - US: ISM non-manufacutring rebounds
Published On Tue, May 6 2008, 07:41 GMT - US: Payrolls decline less than expected
Published On Mon, May 5 2008, 07:51 GMT - US: Consumer confidence declines further
Published On Wed, Apr 30 2008, 08:17 GMT
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