The Lastest Macroeconomic News

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.

12.02.2009 21:00 Industrial production down by 12.0% in euro area and by 11.5% in the EU27

In December 2008 compared with November 2008, seasonally adjusted industrial production fell by 2.6% in the euro area (EA15) and by 2.3% in the EU27. In November production decreased by 2.2% in both zones. In December 2008 compared with December 2007, industrial production declined by 12.0% in the euro area and by 11.5% in the EU27. Compared with 2007, the average industrial production index for 2008 fell by 1.7% in the euro area and by 1.6% in the EU27. These estimates are released by Eurostat, the Statistical Office of the European Communities. In December 2008 compared with November 2008, production of energy rose by 1.1% in the euro area and by 0.8% in the EU27. Non-durable consumer goods fell by 0.9% and 0.8% respectively. Capital goods decreased by 2.5% in the euro area and by 2.8% in the EU27. Durable consumer goods dropped by 2.8% and 3.0% respectively. Intermediate goods declined by 5.7% in the euro area and by 5.2% in the EU27. Among the Member States for which data are available for December 2008, industrial production fell in nineteen and rose only in Lithuania (+1.1%). The most significant falls were registered in Slovakia (-12.7%), Ireland (-10.2%), Romania (-8.6%) and Germany (-4.9%). In December 2008 compared with December 2007, production of energy fell by 3.3% in both the euro area and the EU27. Non-durable consumer goods decreased by 3.9% and 4.1% respectively. Capital goods declined by 11.7% in the euro area and by 12.2% in the EU27. Durable consumer goods dropped by 14.5% and 14.1% respectively. Intermediate goods fell by 20.3% in the euro area and by 19.2% in the EU27. In December 2008, industrial production fell in all Member States for which data are available. The largest decreases were registered in Estonia (-20.7%), Spain (-19.6%), Sweden (-18.4%), Romania and Slovenia (both -17.5%).

07.02.2009 11:32 Russia`s foreign trade balance expanded 32 percent in 2008 reaching roughly $201.155bn

Russia`s foreign trade balance expanded 32 percent in 2008 reaching roughly $201.155bn, the Federal Customs Service said. Foreign trade grew 33.2 percent to nearly $734.992bn, with exports rising 33 percent to $468.073bn, and imports 33.6 percent to $266.918bn. In the fourth quarter of 2008 alone, foreign trade balance stood at 32.278bn. Foreign trade, however, shrank 5.4 percent compared with the same period a year earlier, to $162.275bn. Exports dropped 10.5 percent to $97.277bn, while imports inched up 3.4 percent. The country`s top statistics body said Russia`s gross domestic product grew 5.6%YoY in 2008. Russia`s Economic Development Ministry earlier revised its 2008 GDP growth from 6.0% to 5.6%. Russia`s economy grew 8.1% in 2007 and the government expected GDP to grow 7.8% in 2008 but had to lower its forecast to 6.0% due to the global financial crisis. Mr Alexei Kudrin Finance Minister said Russia`s GDP growth will be close to zero and budgetary revenues could decline 40% in 2009 amid the ongoing global financial crisis. He said that "Budgetary revenues will decline by RUB 4.4 trillion or more than 5.4% of GDP, suggesting Russia`s budgetary revenues could decline from RUB 10.9 trillion to RUB 6.5 trillion. He said Russia would have to spend a significant portion of its reserve funds to cover the 2009 budget deficit, and increase borrowing in 2010-2011.

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