The Lastest Macroeconomic News

12.04.2009 10:44 US will overcome recession in 2009 second half; unemployment to rise further

The U.S. recession will be over in September, but not the unemployment, which may continue to rise until the second half of 2010, says a survey released April 10th. The Blue Chip Economic Indicators survey of private economists predicts a 5 percent and 1.8 percent contraction in U.S. gross domestic product for the first two quarters of the year respectively. The third quarter of 2009 brings a more hopeful prediction of 0.4 percent growth. The survey, conducted April 3-6, revealed a "long road ahead" attitude from the economists. It showed much of the anticipated turnaround in the economy, now in its 16th month of recession, would be driven by some improvement in consumer spending, housing, business inventories and exports. Yet, above-trend growth was not expected until the second half of 2010. "The end of the decline isn`t the beginning of the recovery," said David Resler of Nomura Securities. "It`s like a boxing match. Even if you win the fight, it`s not going to feel as good when you get out of the ring as when you went in." Indeed, economists` prospects for the labour market remain bleak and just 12 percent expect the unemployment rate to fall some time this year. More than a third of respondents expect the jobless rate to peak in the first half of 2010, while about half did not see unemployment declining until the second half of next year. By December of this year, the economists on average expect the unemployment rate to reach 9.5 percent, up from the 8.5 percent reported for March.

07.04.2009 22:20 Euro area GDP down by 1.6% and EU27 GDP down by 1.5%

Euro area (EA15) GDP fell by 1.6% and EU27 GDP by 1.5% during the fourth quarter of 2008, compared with the previous quarter, according to second estimates from Eurostat, the Statistical Office of the European Communities. In the third quarter of 2008, growth rates were -0.3% in both zones. In comparison with the same quarter of the previous year, seasonally adjusted GDP declined in the fourth quarter of 2008 by 1.5% in the euro area and by 1.4% in the EU27, after +0.6% and +0.7% respectively in the previous quarter. In the fourth quarter of 2008 and among the Member States for which seasonally adjusted GDP data are available, Slovakia (+2.1%) recorded the highest growth rate compared with the previous quarter, followed by Cyprus (+0.6%), Greece and Poland (both +0.3%). In the fourth quarter of 2008, household final consumption expenditure declined by 0.3% in the euro area and by 0.4% in the EU27 (after +0.1% and 0.0% respectively in the previous quarter). Investments fell by 4.0% in the euro area and by 3.3% in the EU27 (after -0.7% and -1.1%). Exports fell by 6.7% in the euro area and by 6.1% in the EU27 (after -0.2% and -0.3%). Imports decreased by 4.7% in the euro area and by 5.0% in the EU27 (after +1.3% and +0.9%). Among the main partners of the EU, GDP decreased by 1.6% in the US in the fourth quarter of 2008 (-0.1% in the previous quarter). In Japan GDP fell by 3.2% in the fourth quarter of 2008 (-0.4% in the previous quarter). Compared with the fourth quarter of 2007, GDP declined by 0.8% in the US (+0.7% in the previous quarter) and by 4.3% in Japan (-0.2% in the previous quarter). Over the whole year 2008, GDP grew by 0.8% in the euro area and by 0.9% in the EU27, compared with +2.6% and +2.9% respectively for 2007. Over the whole year 2008, GDP grew by 1.1% in the US (+2.0% in 2007) and declined by 0.6% in Japan (+2.4% in 2007).

30.03.2009 21:22 Japan`s industrial production falls 9.4 percent in February 2009

Industrial production in Japan fell for a fifth month in a row, down 9.4% in February from the previous month, to stand at 68.7, according to data released March 30th from Japan`s Ministry of Economy, Trade and Industry. The seasonally adjusted index was down 38.4% from the previous year. The Ministry of Economy, Trade and Industry says the figure marks the fifth straight month of decline, with especially steep cutbacks among makers of transportation equipment and general machinery. But the ministry said Monday it is a slight improvement over January`s record 10.2 percent plunge, suggesting output may have already hit bottom. Shipments were at 70.9, down 6.8% from a month ago. However, production is expected to increase 2.9% in March and to rise 3.1% in April, according to the Survey of Production Forecast in Manufacturing, the ministry said.

26.03.2009 20:50 US GDP fell at annual rate of 6.3% in the fourth quarter of 2008

US real gross domestic product (GDP) fell at an annual rate of 6.3 percent in the fourth quarter of 2008, (that is, from the third quarter to the fourth quarter), according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent. Corporate profits fell 16.5%, the largest decline since the fourth quarter of 1953. The GDP estimates released March 26th are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the decrease in real GDP was 6.2 percent. The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that were partly offset by a positive contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased. Most of the major components contributed to the much larger decrease in real GDP in the fourth quarter than in the third. The largest contributors were a downturn in exports and a much larger decrease in equipment and software. The most notable offset was a much larger decrease in imports. The price index for gross domestic purchases, which measures prices paid by US residents, decreased 3.9 percent in the fourth quarter, 0.2 percentage point less of a decrease than the preliminary estimate; this index increased 4.5 percent in the third quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.2 percent in the fourth quarter, compared with an increase of 2.8 percent in the third.

21.03.2009 11:45 Russia`s economy shrank 8 percent in the first two months of the year

Russia`s economy shrank 8 percent in the first two months of the year, the Economy Ministry said on Friday, as First Deputy Prime Minister Igor Shuvalov signalled that growth could return by the year`s end. The Russian economy has been rocked by a collapse in oil prices, vast outflows of capital and waning demand for exports as the global economic crisis intensified. Consequently, gross domestic product (GDP) is likely to contract by 7 percent year-on-year in the first quarter, Economy Minister Elvira Nabiullina told the government on Thursday, according to the text of her speech published on March 20. The ministry stuck by its forecast for full-year contraction of just 2.2 percent, suggesting things could improve before too long. That optimism was picked up by Shuvalov. "In some sectors we are noticing more liveliness, and a positive mood," he told reporters on Friday. "We are already near the bottom and we feel that by the end of the year we could have growth... (But) it could be worse if the situation on the external market deteriorates." The Economy Ministry`s first quarter forecast would be twice as fast as the contraction seen by economists in a Reuters poll and compares to growth of 1.1 percent in the previous quarter. However, data suggests that the situation stabilised in February - even though the slowdown is in full swing and companies are cutting thousands of jobs a day - giving some cause for investors and politicians to feel more optimistic. Authorities have managed a depreciation of the currency, avoiding panic but also reducing imports to keep the current account balance in surplus. Oil is now worth $5 more than the $41 a barrel year average factored into the government`s 2009 forecasts and budget. But any signs of light at the end of the tunnel could be quickly extinguished by a renewed slump in crude prices. "In an optimistic scenario of renewed world economic growth in 2010, and rising oil prices, the Russian economy could grow by between 2 and 4 percent in 2010," Nabiullina said. She added that the realisation of government anti-crisis measures - worth some 1.6 trillion roubles ($47 billion) this year - would play an key part in the economy`s turnaround.

15.03.2009 19:41 Japan`s industrial production declined 10.2% in January from the previous month

A final report from the Ministry of Economy, Trade and Industry revealed that Japan`s industrial production declined 10.2% in January from the previous month, revised down from a 10% fall estimated initially. It was the biggest fall on record. Year-on-year, decline in production was 31%. In January, shipments were down 11.4% and inventory fell 2%. The ministry confirmed the preliminary estimate released on February 27. On a yearly basis, shipments tumbled 31.6%, while inventory registered a 2.8% increase. Further, production capacity declined by a revised 12.9% month-on-month, larger than the 11.8% fall estimated earlier.

10.03.2009 22:36 U.S. economy to contract at a rate unseen since the Great Depression

A recent survey that polled 51 forecasters revealed that the economy of the U.S. performs weaker than the experts expected a month ago. Yet the analysts say that the recovery will likely to come later this year. The study was conducted by the Blue Chip Economic Indicators prior to the unemployment report released by the government on March 6. According to the respondents the U.S. GDP will drop at a 5.3% annual rate in the Q1 and will further decline at a 2% rate in the Q2. However the third quarter is expected to record the expand in the economy at a 0.5% rate with a 1.8% in the fourth quarter. For the whole year experts predict a 2.6% decline, the largest annual contraction since the Great Depression, while a month ago analysts forecasted a decrease of 1.9%. The change in the prospects reflects a large drop in business inventories, decreases in non-residential fixed investment and falls in residential investment. The survey says that in the first half of the year the economy will also be pressured by "continued, albeit diminishing declines in consumer spending and falling exports. Consumer spending is expected to start awakening in the second quarter affected by the energy costs, tax cuts contained in a recently passed fiscal stimulus package and some loosening of credit conditions. Yet the experts note that the spending will be modest in view of reminders of sharp declines in home prices and retirement savings and stubbornly high levels of unemployment. The recovery is forecast to quicken next year with a 2.3% annual growth rate to be recorded in 2010.

03.03.2009 21:17 US manufacturing sector activity rose unexpectedly in February 2009

Manufacturing sector activity rose unexpectedly in February, inching up for a second month following eleven straight months of decline, but still indicating contraction, a purchasing managers` group said. The Institute for Supply Management`s (ISM) manufacturing index rose to 35.8 from 35.6 in January. Economists predicted a decline to 33.8, according to a Briefing.com consensus survey. Index readings above 50 are considered to indicate growth, while levels below 50 signal contraction. Readings below 41 are associated with a recession in the broader economy. The index hit a 28-year low of 32.9 in December. An uptick in the production index boosted the overall manufacturing to 36.3, up 4.2 points from January`s 32.1. But employment hit a record low, falling 3.8 points to 26.1. Manufacturing is considered a key indicator in assessing the strength of the economy as a whole. Rising unemployment in the U.S. and the global economic slowdown have reduced demand for American products at home and abroad.

28.02.2009 15:22 US GDP fell at an annual rate of 6.2 percent in the October-December quarter

The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession. The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.2 percent in the October-December quarter, the deepest slide since the first quarter of 1982. The government last month estimated the drop in fourth-quarter GDP at 3.8 percent. The weaker GDP estimate reflected downward revisions to inventories and exports by the department. The decline was worse than analysts` expectations for a 5.4 percent contraction in fourth-quarter GDP. The economy expanded 1.1 percent in 2008, the slowest pace since 2001, the department said. Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 percent rate, the biggest fall since the second quarter of 1980, as household wealth plunged. That compared with a 3.5 percent fall estimated last month.

24.02.2009 22:25 The Russian GDP contracted 8.8 percent y-on-y in January 2009

The Russian GDP contracted 2.4 percent in month-on-month terms in January and is likely to continue to contract throughout the first quarter, - Economy Minister Elvira Nabiullina said. Compared to January 2008 Russian GDP decreased 8.8 percent. Russia revised its economic outlook for 2009 earlier this month, forecasting the economy would contract by 2.2 percent on the assumption that the price for oil, Russia`s main export, averaged $41 per barrel throughout the year. "The trend (of economic contraction) will stay throughout the first quarter," Nabiullina said in Siberia at a session of the State Council chaired by President Dmitry Medvedev. The Economy Ministry later clarified the January data was adjusted for seasonal and calendar factors. The year-on-year data will be published later this month in the ministry`s monthly state of economy report. Russia`s GDP grew 5.6 percent in 2008, the lowest since 2002. The International Monetary Fund has forecast earlier this month that the Russian economy would contract 0.7 percent in 2009 but grow 1.3 percent in 2010.

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