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US: Eco data give no signs of clear improvement yet

Fri, May 16 2008, 09:52 GMT
by KBC Market Research Desk

KBC Bank

The New York Empire State manufacturing survey showed a small decline in May from 0.63 to -3.33. The decline follows a steep rise in April from -22.23. Looking at the details, prices paid rose from 57.29 to 69.57 while prices received slowed from 20.83 to 15.22. New orders were little changed (from 0.06 to -0.46) and this was also the case for the number of employees (1.09 from 0.00). Shipments slowed from 17.49 to 4.55 and inventories declined from -4.17 to -6.52. Unfilled orders improved from -6.25 to -4.35. The general Business conditions index (six months from now) improved slightly from 19.57 to 23.88. The report was too close to expectations to move the markets.

The Philadelphia Fed survey on the manufacturing sector improved slightly from -24.9 to -15.2 and this outcome was also slightly better than expected. Nevertheless, the outcome still points to a contraction in manufacturing activity in the region. Price indicators (both prices paid and prices received) were slightly higher again and well in positive territory at 53.8 and 31.6 respectively. Orders improved from -18.8 to -3.7 and this was also the case for shipments orders (2.2 from -8.0) and the number of employees (-1.0 from -11.0). Unfilled orders declined from -16.8 to -19.1.

Initial jobless claims were little changed in the week to May 10 at 371K from 365K. The continuing claims rose from 3032K to 3060K, slightly more than expected. The data didn’t bring much new info on the labour market.

US industrial production declined a steeper than expected 0.7% in April compared to a downward revised rise of 0.2% in March. The decline was mostly due to the manufacturing sector (-0.8%) and mining (-0.8%). Utility production was slightly higher on a monthly basis. Within the manufacturing sector, the 8.2% decline in vehicle production did catch the eye.

EMU: Germany powers growth in Q1

In April, euro zone headline inflation slowed from 3.6% Y/Y in March to 3.3% Y/Y in line with the flash estimate. It was the first slowing in seven months time. Although the current elevated inflation levels will remain a concern at the ECB, the drop in the core inflation rate from 2% Y/Y to 1.6% Y/Y should provide some relief.

In Q1, the euro zone economy grew by 0.7% Q/Q and 2.2% Y/Y, which was stronger than the expected 0.5% Q/Q. The strong performance was mainly due to Germany, where the economy boomed by 1.5% Q/Q. No details were available yet, but the German statistical office stated that growth was driven by investments and that also consumption growth had contributed to the strong growth figure. In the coming quarters, growth is expected to slow and fall below trend, which is necessary to bring the inflation rate back in line with price stability.

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Published on  Fri, May 16 2008, 11:44 GMT

Archive

• US: Weak ADP employment suggests weak payrolls
  Published On Thu, Jul 3 2008, 07:40 GMT
• US: ISM report not as bad as expected, but prices again higher
  Published On Wed, Jul 2 2008, 07:27 GMT
• US: Personal income jumps on tax rebates
  Published On Mon, Jun 30 2008, 08:03 GMT
• US: Stabilization in Existing Home sales, but no recovery in housing yet
  Published On Fri, Jun 27 2008, 07:24 GMT
• US: Housing market is not yet recovering
  Published On Thu, Jun 26 2008, 07:42 GMT

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