In the week ended March 21, initial claims rose by 8 000 from a downwardly revised 644 000 to 652 000, which was close to the consensus estimate. Continuing claims, which are reported with a one-week lag, rose another 122 000 to 5 560 000, while only a slight increase was expected. Especially the steep rise in continuing claims raises fears that next’s weeks payrolls report will again show an awful picture of the US labour market.
The final figure showed a slight downward revision in the fourth quarter (annualised) GDP figure from -6.2% Q/Q to -6.3% Q/Q. The downward adjustment was due to lower investments, government consumption and a faster pace of inventory liquidation, which was partially offset by a narrower net export deficit.
EMU: Bank lending slows further in February
M3 money supply growth and bank lending slowed slightly in February. M3 money supply growth slowed from an upwardly revised 6.0% Y/Y to 5.9% Y/Y, while the three month average showed a sharper slowing (from 7.1% to 6.5%). Loans to households slowed to the very low level of 0.7% Y/Y (from 1.2% Y/Y) and also loans to non-financials slowed further. These data indicate that the recession and thight credit standards slowed the appetite for lending and the outlook for the coming months remains bleak.
Other: UK retail sales show sharp plunge
In the UK, retail sales showed its first monthly decline in five months. In February, retail sales dropped by 1.9% M/M, while a more modest decline was expected (- 0.4% M/M). The January outcome was upwardly revised from 0.7% M/M to 0.8% M/M. Looking at the details, food stores fell by 0.3% M/M, while non-food plunged by 3.2% M/M due to very weak sales of clothing, textile & footwear (-3.7% M/M), household store (-1.9% M/M) and other stores (-4.8% M/M). These data indicate that households are cutting back spending after being attracted by large discounts in the previous months. In the months to come, spending is expected to remain weak and might put a drag on first (and second) quarter GDP.
