The Lastest Macroeconomic News

05.04.2010 23:06 Russian Inflation Slows to 12-Year-Low 6.5% as Ruble Gains

Russia`s inflation rate fell to the lowest level in 12 years as a stronger ruble made imports cheaper and a sluggish recovery damps consumer demand, allowing the central bank to continue cutting rates. The rate dropped to an annual 6.5 percent last month from 7.2 percent in February, the Federal Statistics Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 15 economists was for the rate to decline to 6.6 percent. Prices advanced 0.6 percent from February. Bank Rossii has cut its benchmark refinancing rate 12 times in the last year to 8.25 percent to help the economy recover from its worst slump on record. Interest rates will fall further if the government meets its inflation target of between 6.5 percent and 7.5 percent for the year, Finance Minister Alexei Kudrin said in March. A steady decline in inflation was one of Russia`s main economic achievements last year, Alfa Bank economists led by Natalia Orlova in Moscow said in a research note on April 1. By keeping real interest rates in positive territory, the Russian central bank is helping to generate retail deposit inflows to banks. Even so, banks are unable to take advantage of slowing consumer-price growth as loan demand remains weak and companies struggle to pass on producer-cost increases, Alfa said. Price increases for services and non-food items led inflation last month, the statistics service said.

27.03.2010 12:35 U.S. GDP Revision Fail to Downplay Strength of Q4 Recovery

The growth of U.S. GDP in the final quarter of 2009 was most significant in the last six years. According to verified data, U.S. GDP rose in fourth quarter to 5,6%. Initially, a month ago, reported the growth of the economy during the reporting period by 5,9%. Compared with the same period of 2008, GDP increased by 0,1%. For all the same in 2009 U.S. GDP declined by 2.4%. Compared with the originally published, the government revised downward investment in business structures, expenditure on services and investment in inventory. The downward revision to U.S. GDP is not good but at the same time it is important to realize that 5.6 percent GDP is still the strongest pace of growth reported since the third quarter of 2003, more than 6 years ago. It is also the fastest pace of fourth quarter GDP growth of all G7 nations which is not something to dismiss. In the fourth quarter, the U.S. economy grew at least 5 times faster than the Eurozone and U.K. A downward revision in personal consumption, weaker gross private investment and a larger than previously estimated decline in government consumption all contributed to the downward revision of GDP.

20.03.2010 13:41 Russian Industrial Production Grew 1.9% in February 2010

Russian industrial production expanded at a slower pace in February, led by manufacturers of steel pipes and rail freight containers, signaling the recovery of domestic demand hasn`t gained full steam. Output at factories, mines and utilities rose 1.9 percent after a 7.8 percent gain in January, the Federal Statistics Service in Moscow said. Non-seasonally adjusted output rose 4.8 percent from January, which began with a 10-day holiday. The median estimate of 12 economists in a Bloomberg survey was for annual and monthly increases of 6.6 percent. In January-February period Russian industrial production grew 5.8 percent from the year earlier. Domestic demand is still suffering; it hasn`t fully recovered, Tatiana Orlova, an economist at ING Bank NV in Moscow said by telephone today. Among external factors, oil prices didn`t provide a big boost because they only shot up at the end of the month. Urals oil, Russia`s chief export blend of crude, reached last month`s low of $68.66 on Feb. 8 before climbing back up to $75.26 a barrel at the end of the month. A government stimulus, companies` efforts to stabilize inventories and growing exports have prompted a recovery this year after industrial output contracted for 12 months in a row since October 2008. The economy shrank 7.9 percent last year, the worst slump since the collapse of the Soviet Union in 1991.

14.03.2010 17:28 Japan GDP growth revised down to 3.8 growth in the October-December quarter

Japan GDP growth revised down to 3.8 growth. Japan`s economy grew slightly less than initially estimated in the October-December quarter, the government said, chiefly due to weaker capital investment. Gross domestic product (GDP) expanded at an annual 3.8 percent pace in the October-December quarter, a downgrade from the preliminary figure of 4.6 percent released last month, according to the Cabinet Office. On a quarterly basis, the world`s second-largest economy grew 0.9 percent in the three months ended December 31 from the July- September period, slower than the preliminary reading of a 1.1 percent growth. Capital investment, the amount companies spend on new assets, gained 0.9 percent from the previous quarter, down from an initial reading of 1 percent. Private inventory pushed down the GDP by 0.1 percentage point, instead of the first estimate of the positive contribution of 0.1 point. "Even though the growth rate is still positive, we still need to watch economic conditions closely," Chief Cabinet Secretary Hirofumi Hirano told a press conference, stressing that Japan`s economic condition remains severe.

06.03.2010 16:01 Russian economy grew 5.2 percent y/y in January 2010

In January 2010, the Russian economy grew 5.2% compared to January 2009, said Deputy Economic Development Minister Andrei Klepach. Compared to December 2009, GDP was up 0.3%. The GDP and economic growth is positive and supported by consumer demand, Klepach pointed out. Investment demand and risks related to unemployment remain the weak links, he added. According to the Ministry`s preliminary estimates, the Russian economy grew by over 3% in the fourth quarter of 2009. This year, it is expected to grow 3.1%. The Russian Federal Statistics Service said the country`s GDP dropped by 7.9% in 2009, the biggest decline in the last 15 years. In 2008, it was up 5.6%. Industrial output in Russia rose 7.8% in January from the same month the year earlier, the statistics office said on Feb. 15. However production fell a steep 20.4% in January from December, a plunge explained by the large number of holiday days in in January. Industrial production fell 10.8% for 2009 as a whole as Russia was hard hit by the economic crisis and only started to recover year-on-year from November.

23.02.2010 13:29 Japan Q4 2009 GDP grew 1.1 percent qtr/qtr and 4.6 percent annualised

Japan`s economy grew 1.1 percent in October-December from the previous quarter, but policy-makers fear the recovery could lose momentum as the effect of stimulus fades. Spending by governments worldwide to fight the deepest recession in decades has continued to underpin growth in the world`s second-biggest economy and its peers in the West. The increase in Japan` gross domestic product (GDP) was bigger than a median market forecast of a 0.9 percent rise. That translated into an annualised increase of 4.6 percent, against a forecast of 3.7 percent growth. That followed a revised reading of zero growth in the July-September quarter. The U.S. economy grew at an annualised clip of 5.7 percent in the same quarter, while the euro zone economy expanded 0.1 percent on the quarter. Japan`s fourth quarter growth was led by exports and corporate investment, which picked up for the first time since January-March 2008. Economists polled by Reuters expect Japanese growth to slow to 0.2 percent in January-March and the following quarter.

14.02.2010 13:10 GDP increased by 0.1% in both the euro area and the EU27 during the fourth quarter of 2009

GDP increased by 0.1% in both the euro area (EA16) and the EU27 during the fourth quarter of 2009, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2009, growth rates were +0.4% and +0.3% respectively. Compared with the same quarter of the previous year, seasonally adjusted GDP decreased by 2.1% in the euro area and by 2.3% in the EU27 in the fourth quarter of 2009, after -4.0% and -4.3% respectively in the previous quarter. During the fourth quarter of 2009, US GDP increased by 1.4% compared with the previous quarter, after +0.6% in the third quarter. US GDP rose by 0.1% compared with the same quarter of the previous year (-2.6% in the previous quarter). Over the whole year 2009, GDP fell by 4.0% in the euro area and by 4.1% in the EU27. In December 2009 compared with November 2009, seasonally adjusted industrial production fell by 1.7% in the euro area (EA16) and by 1.9% in the EU272. In November production grew by 1.4% and 0.9% respectively. In December 2009 compared with December 2008, industrial production declined by 5.0% in the euro area and by 4.9% in the EU27. Compared with 2008, the average production index for 2009 fell by 14.9% in the euro area and by 13.9% in the EU27.

30.01.2010 16:41 U.S. GDP Grew By 5.7 percent In The 4th Quarter of 2009

The U.S. Department of Commerce released its preliminary 4th Quarter GDP calculation on Jan 29th. It looks pretty good. GDP grew by a whopping 5.7% annualized pace during the quarter, the fastest growth the U.S. has seen since 2003. That`s the second quarter of positive income growth, and significantly better than the 3rd quarter`s 2.2% growth. Let`s dig into the report. First, a disclaimer: 4th quarter GDP may not have been 5.7%. In fact, it`s very likely it wasn`t. This is just the first estimate, and there are two more revisions to come before the number is final. You may recall that 3rd quarter GDP started at 3.5% in its first estimate, only to be revised downward twice, to eventually settle at a much more mild 2.2% rate. So let`s look at what makes up the 4th quarter`s growth. As it turns out, personal consumption actually did worse in the 4th quarter than the prior. It made up 1.4%, versus 2.0% in the 3rd quarter. Within that, goods did worse than services, adding 0.6% and 0.8% growth, respectively. As for those goods, Auto sales actually brought down the quarter`s GDP by 0.6%, compared to adding 1.45% in the 3rd quarter. Gross private domestic investment played a huge role, accounting for 3.8% of the growth. That compares to a measly 0.5% rate in the 3rd quarter. The largest component comes from the change in real private inventories. It made up 3.4% of the 5.7% growth. That`s a vastly larger contribution than in the third quarter, when this component made up just 0.7%. Businesses didn`t liquidate their inventories as much in the 4th quarter as in the 3rd. This means that final sales made up the other approximately 2.2% of the 5.7% growth. Another thing to note about the investment contribution: it had more to do with nonresidential than residential fixed investment. Business investment added 0.3%, up from a decline of 0.2% in Q3. Meanwhile residential investment accounted for only 0.1% -- that`s down from a 0.4% contribution in the 3rd quarter. Net exports were positive, accounting for 0.5% of the quarter`s GDP. This is also better than Q3, when they resulted in a 0.8% decline. So this is good news, but, again, we don`t know what the final number will actually be. I would also suggest holding off on popping the champagne to celebrate a robust U.S. economy. Most economists predicted a healthy rate of GDP in Q4-2009, but expect that to decline from there to more moderate levels through 2010. And unemployment is also expected to hover near double-digits throughout the year.

23.01.2010 13:52 Russian industrial production plunged 10.8% in 2009 and rose 2.7% in December 2009

In December 2009 russian industrial production rose 2.7% a 12-month comparison but plunged 10.8% for all of 2009. Russian industry has been severely hit by the global economic crisis, with car production plummeting 59.4%, Rosstat said. Industrial production picked up again in November 2009, rising 5% on a monthly basis and 2.7% on a yearly basis. International ratings agency Fitch on Jan. 22 raised its outlook on the Russian economy to "stable" from "negative," saying it had greater confidence in Russia`s financial and economic prospects. Producer prices in the Russian Federation jumped 0.5% in December 2009 after a 2-month contraction and increased 13.9% in 2009, the statistical authority said in a press release. In December 2009 the Producer Price Index, in line with preliminary estimates, came in at 100.5% and 113.9% YTD (92.4% in December 2008 and 93% YTD)," said the press release. As reported earlier, Russias consumer prices grew 0.4% in December and 8.8% in 2009. Prices of businesses that extract mineral resources jumped 5.8% during the month and up 49.2% YTD. In addition, their crude prices rose 8.2%. December prices in the processing sector dropped 0.8% primarily because of a 6.3% slide in oil products. In addition, prices in the chemical industry rose 0.9% as industrial gas prices increased and pharmaceutical prices climbed 4.2%. As for metal production, ferroalloy output costs increased, except for those produced using blast-furnaces, by 17.3%, while lead, zinc and tin production outlays rose by 11.2%. Tariffs of businesses that produce and supply electric power, water fell 0.5% during the month.

19.01.2010 22:09 US industrial production rose 0.6% in December 2009

On the back of higher electricity and gas consumption amid a cold snap, industrial production rose 0.6% in December, the Federal Reserve said on Jan. 15. The December reading matched the 0.6% increase in November, which was initially reported at 0.8%. "Manufacturing production fell a modest 0.1% in December after posting strong 0.9% growth in November. Raw material industries continued to lead the gains as the beneficial impact of less inventory destocking boosted growth in these industries," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "For the most part, manufacturing production is starting to exhibit a saw tooth pattern of strong growth followed the next month by a small decline because the pace of growth is decelerating. "The initial burst of growth reflected the rebound from a severe recession, but now, the basic fact is that consumers are impaired with debt, jobs are still declining, and nonresidential construction activity will decline most of the year," he added. "Fourth quarter manufacturing production increased at a 5.7% annual rate versus the third quarter. Unfortunately, a strong pace of manufacturing production growth cannot be maintained in a relatively weak economic recovery." For the final quarter as a whole, industrial production increased at an annual rate of 7%.

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