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The US economy grew at an annual rate of 2,5 percent in the fourth quarter of 2006 and will expand at a 2.4 percent pace in the first three months of 2007, according to the median forecast of 80 economists surveyed from Dec. 1 through Dec. 8. Both estimates are down from the previous survey.
The European Commission said recovery in the euro zone was broad-based and sustainable, with domestic demand emerging as the mainstay of economic expansion. The euro area is therefore well placed to face a somewhat less favourable international environment deriving from the US slowdown, - the commission said. The commission said recent developments were consistent with the earlier forecasts putting euro area average growth at 2,6% for 2006, the best performance in 6 years.
Deputy Prime Minister Alexander Zhukov said that Russian GDP grew 6,8% from January to November of 2006. Our economic growth can reach 7,0% in 2006, but the 2007 advance is predicted at no more than 6,0%.
The OECD said in the beginning of December that its composite leading indicator rose to 109.7 in October from a revised 109.5 in September. The September figure was previously given as 109.6. The OECD said analysis of the CLI data points to a weakening of growth in the US and the euro zone in the period ahead, but to improved performance in Japan. For the US, the CLI edged up to 107.7 in October from 107.6 in September, but its six-month rate of change weakened. The CLI for the euro zone rose to 109.4 from 109.1 but its six-month rate of change fell for the fifth month in a row. Meanwhile, the Japan CLI rose to 100.8 from 100.6 and its six-month rate of change improved for the third month in succession. The UK CLI rose to 102.0 from 101.8 and its six-month rate of change improved after being relatively flat since June, the OECD said.

United States

The US economy grew at an annual rate of 2,5 percent in the fourth quarter of 2006 and will expand at a 2.4 percent pace in the first three months of 2007, according to the median forecast of 80 economists surveyed from Dec. 1 through Dec. 8. Both estimates are down from the previous survey.
Worker productivity grew at the slowest pace of the year in the third quarter while labor costs were revised down more than expected, easing concern that surging incomes will stoke inflation. Productivity rose at an annual rate of 0,2% in the third quarter after a 1,2% gain the previous three months, said the Labor Department. A measure of labor costs rose at a 2,3% pace and was up 2,9% in the 12 months ended in September, less than first estimated. Economists expected productivity, a measure of how much an employee produces per hour, to rise at 0,5% annual rate for the third quarter, according to the median of 64 forecasts in a Bloomberg News survey. Unit labor costs, which are adjusted for efficiency gains, were projected to rise at a 3,2% pace.
Industrial production in the U.S. unexpectedly rose in November, reflecting a jump in auto manufacturing that may not be sustained. The 0.2 percent increase last month followed no change in October, the Federal Reserve said today. Capacity utilization, which measures the proportion of plants in use, held at 81.8 percent for a second month. Economists expected industrial production to be unchanged after rising 0.2 percent in October, according to the median of 67 forecasts in a Bloomberg News survey.
The Conference Board said that its Consumer Confidence Index rose to 109.0 in December from a revised 105.3 in November and 105.1 in October. The reading was the highest since the index registered 109.8 in April 2006 and was better than Wall Street anticipated. Analysts had been expecting a slight dip in the December reading to about 102.5.

European Union

Seasonally adjusted industrial production decreased by 0.1% in the euro area in October 2006 compared to September 2006. Production declined by 1.1% in September and rose by 1.6% in August. In the EU25 output fell by 0.1% in October 2006 after a decrease of 0.6% in September and an increase of 1.1% in August. In October 2006 compared to October 2005, industrial production rose by 3.6% in the euro area and by 3.4% in the EU25.
The euro area industrial new orders index dropped by 0.6% in October 2006 compared to September 2006. The index fell by 1.4% in September and rose by 3.8% in August. EU25 new orders gained 0.2% in October 2006, after a decrease of 1.0% in September and an increase of 2.7% in August. Excluding ships, railway and aerospace equipment industrial new orders rose by 1.0% in the euro area and by 0.7% in the EU25 in October 2006. In October 2006 compared to October 2005, industrial new orders increased by 12.5% in both zones. Total industry excluding ships, railway and aerospace equipment grew by 12.6% in the euro area and by 11.2% in the EU25.
The first estimate for the euro area trade balance with the rest of the world in October 2006 gave a 2.4 bn euro surplus compared with +0.1 bn in October 2005. The September 20062 balance was +2.1 bn, compared with +1.1 bn in September 2005. In October 2006 compared with September 2006, exports, seasonally adjusted, remained stable, while imports rose by 0.6%. The first estimate for October 2006 extra-EU25 trade was a deficit of 13.2 bn euro, compared with -11.0 bn in October 2005. In September 2006, the balance was also -13.2 bn, compared with -9.6 bn in September 2005. In October 2006 compared with September 2006, exports, seasonally adjusted, fell by 1.2% and imports by 0.4%.
The Economic Sentiment Indicator (ESI) in the EU, produced by the European Commission, continued to rise in November, reaching its highest level since the beginning of 2001, while it remained broadly stable in the Eurozone. The indicator rose by 1.6 points in the EU and decreased by 0.1 point in the Eurozone, to 113.1 and 110.3 respectively. In both areas, sentiment has been on an upward trend since mid-2005. The Business Climate Indicator (BCI) for the eurozone climbed to an all-time high in November, the European Commission said this week. After leveling off in October, the BCI for the 12 nations sharing the same currency picked up again in November, rebounding from 1.41 to 1.54, the highest level in record.
The European Commission said recovery in the euro zone was broad-based and sustainable, with domestic demand emerging as the mainstay of economic expansion. The euro area is therefore well placed to face a somewhat less favourable international environment deriving from the US slowdown, - the commission said. The commission said recent developments were consistent with the earlier forecasts putting euro area average growth at 2,6% for 2006, the best performance in 6 years. Looking ahead, the EU executive said some deceleration in growth was expected for 2007, reflecting the effects of an increase in value added tax in Germany and a somewhat less favourable international environment. Gross domestic product will increase 2,1% in 2007.

Asia

The Cabinet Office said economy of Japan in the September quarter grew by just a third of the pace seen in the March quarter and was also slower than that in the quarter to June, as private demand contracted for the first time in seven quarters. Citing revised data, it said third quarter GDP grew just 0,2% from the previous quarter, lower than the preliminary estimate of 0,5% growth, and was up 0,8% year-on-year against the initial estimate of an annualized rise of 2,0%. In the preceding quarters, GDP had grown 0,7% quarter-on-quarter in the three months to March or at annual rate of 2,7%, and was up 0,3% quarter-on-quarter and up 1,1% year-on-year in the three months to June. The Cabinet Office said private demand subtracted 0,1% from the third-quarter GDP, the first negative contribution since the fourth quarter of 2004.
JP Morgan said it has revised up its 2006 GDP growth forecast for China to 10.6 pct, as accelerating exports and strong consumption growth continue to offset a third quarter slowdown in investment. The brokerage said it expects the economy to grow at a solid, but somewhat slower pace of 9.5 pct in 2007, as fixed-asset investment (FAI) and export growth slow modestly, while consumption remains strong. Administrative controls on land use and bank lending are likely to continue next year, while the central bank is expected to increase interest rates only slightly, with hikes in the bank reserve ratio requirement (RRR) seen as the primary means to contain liquidity, JP Morgan said in a note.

Russia

Russian GDP grew by 8,2% in October, and reached 6.8% in the first ten months of 2007, topping the target of 6,6%, Economic Development and Trade Minister German Gref said. Trade has shown the largest growth 14.6%, he said. Half of the trade growth results from larger retail imports.
Deputy Prime Minister Alexander Zhukov said that Russian GDP grew 6,8% from January to November of 2006. Our economic growth can reach 7,0% in 2006, but the 2007 advance is predicted at no more than 6,0%. Russian GDP rose 6.4% on the year in 2005, slowing from 7.1% in 2004, according to the Federal Statistics Service.
The World Bank also expects Russian GDP up 7,0% this year. The fast growth of domestic market continues to stimulate sustainable economic growth in Russia. Significant net capital inflow together with revenues from natural resource exports feed the domestic demand. Under these conditions, starting in the second quarter of current year, acceleration of economic growth rates has taken place. Based on results of the year, GDP growth may reach 7%, - the report noted.
Industrial production grew 4,1% in January to October 2006 against 3,7% in the same period last year. Investments grew 12,9% in January to November this year and this is the most gratifying figure in our economic development this year.
Inflation in Russia is estimated at 0.5%-0.6% in November, the Economic Development and Trade Ministry said Wednesday. The ministry projects January-November inflation at 8,0%-8.1% against 10% in the same period of last year. The chairman of Central Bank, Sergei Ignatyev, said on November 22 that annual inflation in 2006 will be about 9,0%, in line with the national target inflation level. The economics ministry said consumer prices grew 7.5% in January-October 2006. The ministry also said the foreign trade in the first 10 months of 2006 aggregated $377.8 billion, with a trade surplus of $122.2 billion.