The Lastest Macroeconomic News

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.

21.02.2009 12:47 U.S. industrial production dropped 1.8 percent in January 2009, led by autos

U.S. industrial production fell in January for the sixth time in seven months and more than forecast as companies reduced manufacturing amid a worldwide slowdown in demand. Output at factories, mines and utilities dropped 1.8 percent, after a revised decrease of 2.4 percent in December that was more than previously reported, the Federal Reserve said. Factory output, which accounts for about four-fifths of industrial production, decreased 2.5 percent, led by automakers. Motor vehicle and parts production plummeted 23.4 percent in January following an 8.1 percent drop a month earlier, the report said. Vehicles alone had a 40 percent drop after a 12.6 percent decline the month before. Automakers assembled cars and light trucks at an annual rate of 3.9 million during the month, the lowest since record-keeping began in 1967. Production of consumer durable goods, including vehicles, furniture and electronics, fell 10.5 percent, the biggest monthly drop since November 1959. Utility production increased 2.7 percent after falling 0.2 percent a month earlier, report showed. Mining output, which includes oil drilling, decreased 1.3 percent. Economists forecast industrial production would drop 1.5 percent, according to the median projection in a Bloomberg News survey of 75 economists. Estimates ranged from a decline of 3.1 percent to a gain of 0.5 percent. Capacity utilization, or the proportion of plants in use, fell to 72 percent, the lowest since February 1983, from 73.3 percent in December. Economists had forecast that figure would fall to 72.4 percent, according to a separate Bloomberg survey.

17.02.2009 21:26 The Japan`s GDP shrinks at an annual rate of 12.7% in the fourth quarter

Japan`s economy shrank 3.3 percent in the fourth quarter, the biggest drop since 1974 and further confirmation that the world`s second-biggest economy is in a severe recession as the global economic crisis deepens. It was a bigger fall than the 3.1 percent contraction expected by economists and marked the third consecutive quarter of contraction - the first time this has happened in Japan in seven years. Japan`s gross domestic product figure translated into an annualised fall of 12.7 percent, exceeding a consensus market forecast for a 11.7 percent contraction, government data showed. The pace of contraction surpassed an annualised 3.8 percent drop in the United States, which was the biggest fall in nearly 27 years. In July-September, the Japanese economy shrank 0.6 percent.

14.02.2009 12:40 The euro zone economy saw its deepest contraction on record in the fourth quarter of 2008

The euro zone economy saw its deepest contraction on record in the fourth quarter of 2008, data showed, boosting pressure on the European Central Bank to cut interest rates by 50 basis points in three weeks. Gross domestic product in the 15 countries using the euro in the last three months of 2008 shrank 1.5 percent against the previous quarter for a 1.2 percent fall year-on-year, the European Union statistics office Eurostat said. "Now it`s official: the euro zone economy is in its deepest recession since the end of the Second World War," said Christoph Weil, economist at Commerzbank. "The collapse of exports and a sharp fall in investments were most probably the main reasons for the slump," he said. Economists polled by Reuters had expected a 1.3 percent quarterly drop after 0.2 percent contractions in the second and third quarters, and a 1.1 percent year-on-year decline. "This Friday the 13th is living up to its name. Eurostat has just released `scary` GDP numbers," said Martin van Vliet, economist at ING. "The best we can hope is that the fourth quarter marked the worst quarter in terms of the pace of contraction," he said.

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