Top 5 Economics Graphs of the Week - 4 December 2010

This week we look at the US PMI results; while also reviewing the China PMI data for November. Then we check out the 3rd quarter GDP results for Australia, before wrapping up with a closer look at some US data on the housing market, consumer confidence, and the nonfarm payrolls report.

1. US PMI
The US manufacturing PMI came in at 56.6, a little below consensus 57 and previous 56.9, the non-manufacturing PMI matched consensus at 55.0, and increased vs October's 54.3 reading. So between manufacturing and services there was a bit of variation, also within the results the manufacturing sub-components were not great e.g. falls in new orders, production, employment, exports. But within the services sub-indices there was a bit more positives e.g. rises in new orders, new export orders, employment, etc. So overall the results are generally positive, and not really surprising given where the US economy is at.

2. China PMI
Over to China, the official PMI rose to 55.2 from 54.7 in October; beyond expectations for 54.8. The HSBC Markit index rose to an 8 month high of 55.3 from 54.8 in October. The standouts in the sub-indices were Production (58.5 vs 57.1), Supplier Delivery (48.9 vs 49.3), New Orders was basically flat, but still strong (58.3 vs 58.2), similarly Employees was little changed (52.0 vs 52.1). In general its good to see the index rising, its also positive to see it still in the expansionary zone, and it will give comfort to those watching China's attempt at a managed slowdown as inflation pressures rise.

3. Australia GDP
The Australian economy grew 0.20% q/q in the September quarter, placing Australian GDP up 2.7% year on year. The pace of growth was slower than the expected 0.40% q/q growth, as global volatility, exchange rate pressures on exports, and withdrawal of fiscal stimulus measures took their toll on the Australian economy. Looking forward though the pace of growth is likely to rebound in 2011 as the resources sector surges ahead with a number of large scale mining projects in the pipeline, and farming continues to contribute; and of course the flow on effects to the rest of the economy.

4. US House Prices and Confidence
Two key pieces of data release last week were the Case-Shiller house price index, which showed house prices falling further (no surprise). The other key data point was the Conference Board Consumer Confidence index, which showed a jump to 54.1 (vs consensus 52, previous 50.2). Within the confidence numbers, the present situation index rose to 24 from 23.5 and the expectations index jumped to 74.2 from 67.5 previously. So people are feeling a little better about the future, but just not so much about the here and now. And looking to the housing market, the future may be better, but the short-medium term probably has further downside risk unless the fundamentals sharply turnaround.

5. US Nonfarm Payrolls
The US added 39k nonfarm payrolls in November, vs 151k in October, and well below consensus 168k. Private payrolls were up 50k vs 159k in October. Average hourly earnings were flat, as was the average work week. So overall not a great result, good that it was positive, but basically it lines up with the idea that the US recovery is not going to be linear, and basically that there is going to be choppiness as the US economy muddles through the next year or two.

Summary

So we saw the manufacturing PMI in the US still strong, but with some negatives in the sub-components, the services PMI however was a bit stronger and relatively more promising. Meanwhile in China the manufacturing PMI improved, showing that the concern is rightfully more about the risks of overheating rather than not growing. In Australia, the economy continued to grow, but a little less so as stimulus wore off, but expect the slowdown to be temporary. Back to the US, the housing market is still under the gun, but the consumer is slowly feeling a bit better about the future, in spite of the job market also remaining relatively subdued.

Sources
1. Institute for Supply Management www.ism.ws & Yahoo Finance finance.yahoo.com
2. CFLP www.chinawuliu.com.cn & Markit/HSBC www.markiteconomics.com & National Bureau of Statistics www.stats.gov.cn
3. Australian Bureau of Statistics www.abs.gov.au
4. Conference Board www.conference-board.org & Standard & Poors www.standardandpoors.com
5. Bureau of Labour Statistics www.bls.gov

Article Source: http://www.econgrapher.com/top5graphs-4dec.html

Top 5 Economics Graphs of the Week - 30 October 2010

This week we review the Q3 GDP results from the UK and US, then look at the recent data on the US housing market and consumer confidence. Then we examine some of the monetary policy decisions announced over the week, before wrapping up with a look at the inflation and employment situation in Japan.

1. US GDP
First up is US GDP which grew 0.4% q/q (or 2.0% "annualised" vs consensus 2.0%). On a year on year basis the US economy grew 3.1% vs 3.0% in Q2. Much of the gains were in inventory investment, consumer spending, equipment investment and government spending. So overall, the result was much as expected - relatively ho-hum, showing the US economy recovering - but at a subdued and muddled pace. So of course it's not plain sailing yet, a lot of the damage done during the financial crisis needs to be repaired, and a lot of the excesses need to be unwound before a true sustainable economic recovery can take place in the US.

2. UK GDP
over in the UK the growth rate was relatively strong at 0.8% q/q, which is a little lower than the 1.2% in Q2, but still respectable and enough to disappoint those that were hoping for another round of quantitative easing from the Bank of England. On an annual basis the British economy grew 2.8%, up from 1.7% in Q2. But as with the US, the all clear can't be signaled yet, and it is too soon to rule out further monetary policy stimulus - especially as the UK government seeks to reign in its budget deficit (maybe a bit of contracting on the fiscal and expanding on the monetary). So all the more reason to watch what happens next week!

3. US Consumer Confidence and Housing
Also out in the past week was the much watched Case Shiller House price report for August, which came in weaker on a monthly basis and slowed its increase on a yearly basis. So a disappointing result, but not a surprising result - there's no fundamental basis to expect a strong upsurge in the US housing market (and relatively small basis for sideways movement in prices). So of course it's also unsurprising to see still subdued results in the consumer confidence numbers, albeit with a small increase to 50.2 from 48.5 in September. At the margin the result was positive in that much of the increase was driven by an increase in the future expectations index, which is sensible.

4. Monetary Policy
In monetary policy there were no major events this week, the main items of interest were Denmark, and Sweden both increasing interest rates slightly - but signaling a slow move. The other interesting part was Japan, which expanded the scope of its asset purchase program and brought forward the next meeting date (to just after the Fed's meeting next week). On that note, the next week will be a very interesting week monetary policy-wise as the US FOMC, Bank of Japan, Bank of England, RBA, and ECB are all set to announce policy decisions. The main point of attention will be what the US Fed does in terms of QEII - will it go for a shock and awe campaign, or will it go for an incrementalist approach? Either way it almost seems a certainty now that the second quantitative easing campaign is about to commence.

5. Japan Inflation and Unemployment
In Japan, deflation remained persistent with the CPI falling -1.1% vs -1.0% in August, but the jobless rate slipped slightly to 5.0% vs 5.1% in August on the back of increasing payrolls. As pointed out, the Bank of Japan expanded the scope of its asset purchase program to include lower graded corporate bonds in effort to try and stimulate the economy and try and inject a semblance of inflation. Most remarkably though was the move to hold another meeting next week just after the Fed, which signals that the BOJ is ready to act if the US makes moves to devalue the US dollar. This would not be surprising as the Japanese economy is traditionally an export led economy, and with recent trade results faltering somewhat it may make for an interesting week indeed.

Summary

So we saw the US with relatively subdued growth in Q3, but growth nonetheless. But without showing major signs of strength has all but pave the way for a second campaign of quantitative easing by the US. Meanwhile the UK grew a little faster, and perhaps even blew the case for an extension of the asset purchase program by the Bank of England. We also saw a weakening US housing market and a US consumer stuck in limbo. On the monetary policy front most held, a couple increased, but the real monetary policy action will come next week. In Japan deflation remained, jobless declined slightly, and the BoJ lined itself up to counter any possible dollar devaluing determinations from the Fed next week.

Sources:
1. Bureau of Economic Analysis www.bea.gov
2. UK National Statistics www.statistics.gov.uk
3. Conference Board www.conference-board.org & Standard & Poors www.standardandpoors.com
4. CentralBankNews.info www.centralbanknews.info
5. Trading Economics www.tradingeconomics.com

Article Source: http://www.econgrapher.com/top5graphs-30oct.html

Economic Calendar - Week Starting 25 October 2010

Here's the Economic Calendar for the week commencing the 25th of October 2010. This week the main event is the US Q3 GDP report on Friday, the UK will also release its Q3 GDP data this week. In monetary policy New Zealand and Japan are both due to announce interest rate decisions this week. Japan also has a swath of key monthly data out such as employment, inflation, industrial production, and trade data. The US will also see its much Case-Shiller house price report, and consumer confidence numbers released this week.

(More commentary follows the table)

Day	Time (GMT)	Code	Event/Release	Forecast	Previous
SUN	23:50	JPY	Merchandise Trade Exports (YoY) (SEP)	9.6	15.5
SUN	23:50	JPY	Merchandise Trade Imports (YoY) (SEP)	7.4	17.9
SUN	23:50	JPY	Merchandise Trade Balance Total (SEP)	¥710.0B	¥86.0B
MON	09:00	EUR	EU Industrial New Orders (MoM) (AUG)	2.4%	-1.8%
MON	14:00	USD	Existing Home Sales (SEP)	4.30M	4.13M
MON	14:00	USD	Existing Home Sales (MoM) (SEP)	4.1%	7.6%
TUE	08:30	GBP	Gross Domestic Product (QoQ) (3Q A)	0.4%	1.2%
TUE	08:30	GBP	Gross Domestic Product (YoY) (3Q) A	2.4%	1.7%
TUE	13:00	USD	S&P/Case-Shiller Home Price Index (AUG)		148.91
TUE	13:00	USD	S&P/Case Shiller 20 City (MoM) SA (AUG)	-0.20%	-0.13%
TUE	13:00	USD	S&P/Case-Shiller Composite-20 (YoY) (AUG)	2.20%	3.18%
TUE	14:00	USD	Consumer Confidence (OCT)	49.5	48.5
TUE	21:00	USD	ABC Consumer Confidence (OCT 24)
TUE		EUR	German CPI (YoY) (OCT P)	1.3%	1.3%
TUE	00:30	AUD	Consumer Prices Index (YoY) (3Q)	2.9%	3.1%
WED	12:30	USD	Durable Goods Orders (SEP)	2.0%	-1.5%
WED	14:00	USD	New Home Sales (SEP)	300K	288K
WED	14:00	USD	New Home Sales (MoM) (SEP)	4.2%	0.0%
WED	20:00	NZD	RBNZ Rate Decision (OCT)	3.00%	3.00%
WED		JPY	Bank of Japan Rate Decision (OCT 28)	0.10%	0.10%
THU	04:00	CNY	Leading Index (SEP)		101.91
THU	07:55	EUR	German Unemployment Change (OCT)	-30K	-40K
THU	12:30	USD	Initial Jobless Claims (OCT 23)	455K	452K
THU	12:30	USD	Continuing Claims (OCT 16)	4430K	4441K
THU	21:45	NZD	Exports (New Zealand dollars) (SEP)		3.15B
THU	21:45	NZD	Imports (New Zealand dollars) (SEP)		3.59B
THU	23:15	JPY	Nomura/JMMA Manufacturing PPMI (OCT)		49.5
THU	23:30	JPY	National Consumer Price Index (YoY) (SEP)	-0.6%
THU	23:30	JPY	Jobless Rate (SEP)	5.1%	5.1%
THU	23:30	JPY	National CPI Ex Food, Energy (YoY) (SEP)	-1.5%
THU	23:50	JPY	Industrial Production (MoM) (SEP P)	-0.6%	-0.5%
THU	23:50	JPY	Industrial Production (YoY) (SEP P)	12.3%
THU		CNY	MNI Business Condition Survey (OCT)		69.54
FRI	09:00	EUR	Euro-Zone Unemployment Rate (SEP)	10.1%	10.1%
FRI	12:30	CAD	Gross Domestic Product (MoM) (AUG)	0.3%	-0.1%
FRI	12:30	USD	Gross Domestic Product (Annualized) (3Q A)	2.2%	1.7%
FRI	13:55	USD	U. of Michigan Confidence (OCT F)	68.0	67.9

As noted the key report this week is the US Q3 GDP figures, which will provide a timely insight into where the US economy is at - of course as always its not so much the quantum that matters as much as the breakdown. In other words where is the growth coming from? and what are the flow on effects? In any case the forecasts are for around 2-3%, and will likely slow in the 4th quarter. The UK is also on the GDP radar this week, with expectations for a slower 0.4% q/q rate (compared to 1.2% in Q2), and is likely to only slow further as the UK comes to grips with some of the key challenges it's currently facing.

On the monetary policy front there's the RBNZ in New Zealand, which is likely to hold at 3.00%, as the governor recently signaled rates would likely be on hold until next year (having tightened from 2.50% this year). The bank of Japan has already reached the limit in terms of interest rates, but could come out with further quantitative easing plans in efforts to stimulate the economy and get inflation going.

Speaking of Japan, there's the usual consumer price index data due this week (expected to show continued deep deflation), and employment data (little change expected), and industrial production (a slight decrease), and trade data (also expecting a slower rate of expansion). So combined with potential policy action from the Bank of Japan, the data will give a good insight into where the Japanese economy is headed. Oh and its neighbor has a leading index report out this week too.

Back to the US, the other key data this week is the ever critical housing report; S&P Case-Shiller home price indexes (as well as the existing and new home sales reports), so it will be good to check in on the US housing market. There's also the consumer confidence indexes due out (conference board, and University of Michigan). But of course waiting for positive changes in these data sets is currently like watching paint dry - but do search for insights in the details nonetheless.

So as always, have a great week, watch out for surprises, and stay tuned for updates...

Sources
DailyFX www.dailyfx.com/calendar
Forex Pros www.forexpros.com/economic-calendar/
Forex Factory www.forexfactory.com/calendar.php
Bloomberg www.bloomberg.com
+various statistics websites and central bank websites for verification

Article Source: http://www.econgrapher.com/25oct-calendar.html

Econ Grapher - Economic Calendar - 30 August 2010

Here's the Economic Calendar for the week commencing the 30th of August 2010. This week there's Q2 GDP results from Canada, Australia, Switzerland, and the EU. And of course given that this week brings the start of September we've got PMI figures out of China, the US, and a range of other countries. The other notables will be S&P/Case-Shiller house prices, US consumer confidence, Canada and Aussie current accounts, an ECB rate non-decision and of course US nonfarm payrolls.

(More commentary follows the table)

Day	Time (GMT)	Code	Event/Release	Forecast	Previous
MON		NZD	Imports (New Zealand dollars) (JUL)	3.70B	3.51B
MON		NZD	Exports (New Zealand dollars) (JUL)	3.65B	3.78B
MON		AUD	Company Operating Profit (QoQ) (2Q)	5.8%	3.9%
MON		NZD	NBNZ Business Confidence (AUG)		27.9
MON	09:00	EUR	Euro-Zone Economic Confidence (AUG)	101.6	101.3
MON	12:30	CAD	Current Account (BoP) (Canadian dollar) (2Q)	-$10.0B	-$7.8B
MON	12:30	USD	Personal Income (JUL)	0.3%	0.0%
MON	12:30	USD	Personal Spending (JUL)	0.3%	0.0%
MON	12:30	USD	Personal Consumption Expenditure Core (YoY)	1.4%	1.4%
MON	23:50	JPY	Industrial Production (MoM) (JUL P)	-0.2%	-1.1%
MON	23:50	JPY	Industrial Production (YoY) (JUL P)	14.3%	17.3%
MON	23:50	JPY	Retail Trade s.a. (MoM) (JUL)	0.5%	0.4%
MON	23:50	JPY	Retail Trade (YoY) (JUL)	3.5%	3.2%
MON	01:30	AUD	Retail Sales s.a. (MoM) (JUL)	0.4%	0.2%
MON	01:30	AUD	Current Account Balance (Australian Dollar) (2Q)	-6500M	-16551M
TUE	07:55	EUR	German Unemployment Change (AUG)	-20K	-20K
TUE	07:55	EUR	German Unemployment Rate s.a. (AUG)	7.6%	7.6%
TUE	09:00	EUR	Euro-Zone CPI Estimate (YoY) (AUG)	1.6%	1.7%
TUE	09:00	EUR	Euro-Zone Unemployment Rate (JUL)	10.0%	10.0%
TUE	12:30	CAD	Quarterly GDP Annualized (2Q)	2.5%	6.1%
TUE	13:00	USD	S&P/Case-Shiller Composite-20 s.a. (MoM) (JUN)	0.35%	0.47%
TUE	13:00	USD	S&P/Case-Shiller Composite-20 (YoY) (JUN)	3.50%	4.61%
TUE	14:00	USD	Consumer Confidence (AUG)	51.0	50.4
TUE	18:00	USD	FOMC Meeting Minutes (AUG 31)
TUE	01:00	CNY	Purchasing Managers Index Manufacturing (AUG)	51.5	51.2
TUE	01:00	CNY	HSBC Manufacturing PMI		49.4
TUE	01:30	AUD	Gross Domestic Product (QoQ) (2Q)	0.9%	0.5%
TUE	01:30	AUD	Gross Domestic Product (YoY) (2Q)	2.8%	2.7%
TUE	03:00	NZD	ANZ Commodity Price (AUG)		-0.8%
WED	07:55	EUR	German PMI Manufacturing (AUG F)	58.2	58.2
WED	08:00	EUR	Euro-Zone PMI Manufacturing (AUG F)
WED	14:00	USD	ISM Manufacturing (AUG)	53.0	55.5
WED	14:00	USD	ISM Prices Paid (AUG)	56.0	57.5
WED	01:30	AUD	Trade Balance (Australian dollar) (JUL)	3100M	3539M
THU	05:45	CHF	Gross Domestic Product (QoQ) (2Q)	0.8%	0.4%
THU	05:45	CHF	Gross Domestic Product (YoY) (2Q)	2.6%	2.2%
THU	09:00	EUR	Euro-Zone GDP s.a. (QoQ) (2Q P)	1.0%	1.0%
THU	09:00	EUR	Euro-Zone GDP s.a. (YoY) (2Q P)	1.7%	1.7%
THU	09:00	EUR	Euro-Zone Producer Price Index (YoY) (JUL)	3.9%	3.0%
THU	11:45	EUR	ECB Interest Rate Decision (SEP 2)	1.00%	1.00%
THU	14:00	USD	Pending Home Sales (MoM) (JUL)	-1.5%	-2.6%
THU	14:00	USD	Factory Orders (JUL)	0.5%	-1.2%
THU		EUR	German Retail Sales (MoM) (JUL)	0.5%	-0.9%
FRI	07:15	CHF	Consumer Price Index (YoY) (AUG)	0.4%	0.4%
FRI	08:00	EUR	Euro-Zone PMI Services (AUG F)	55.6	55.6
FRI	08:00	EUR	Euro-Zone PMI Composite (AUG F)	56.1	56.1
FRI	09:00	EUR	Euro-Zone Retail Sales (MoM) (JUL)	0.2%	0.0%
FRI	12:30	USD	Change in Non-Farm Payrolls (AUG)	-105K	-131K
FRI	12:30	USD	Unemployment Rate (AUG)	9.6%	9.5%
FRI	12:30	USD	Change in Private Payrolls (AUG)	46K	71K
FRI	14:00	USD	ISM Non-Manufacturing Composite (AUG)	53.5	54.3

This week we've got more Q2 GDP results out; first up will be Canada, which is expected to show an annualised quarterly growth rate of 2.5% vs 6.1% the previous quarter. Then there's Australia, expected to shrug-off the election issues and clock up 0.9% q/q for Q2. Then there's the EU data, with the Swiss expected to show 0.8% q/q and the wider EU with 1.0%. More or less all lining up with the post-recession recovery bounce, but the key question will be who's still growing come Q3 and Q4... because the easy part of the recovery is over, time for the real hard work to begin!

Now there are a few countries releasing PMI data this week, but no doubt all eyes will be on the two juggernauts; China and the US. Both are going to play critical roles in the course of the global economy over the coming period. China is expected to show a slight rebound - and what ever the figure is it will send strong signals (a weaker figure will confirm the slowdown, a stronger figure will suggest continued growth, and something in between will leave uncertainty in its wake). The US; manufacturing is the strong point, so let's watch this one closely - will the last bastion of the US economic recovery fall?

Another area of interest this week will be the international trade and capital flows; Canada will report its Q2 current account balance, and is expected to show a larger deficit... then Aus will also release its Q2 figure but a smaller deficit is expected. New Zealand will release its trade figures early Monday; with imports expected to jump above exports for the first time in about a year, and Aus will release its July trade balance later in the week.

Elsewhere there's the increasingly important S&P Case Shiller home price index, and US consumer confidence numbers - both will give important insights into the course of the downward spiral of the US economy; as will the nonfarm payroll figures on Friday. In Japan there's industrial production figures and retail trade - both of importance for the Japanese economy which is sitting at the watershed. And of course last but not least there's the ECB monetary policy announcement - not a huge probability of anything significant here, but watch for their analysis anyway... the US Fed will be putting out its recent meeting minutes too.

So as always, have a great week, watch out for surprises, and stay tuned for updates...

Sources
DailyFX www.dailyfx.com/calendar
Forex Pros www.forexpros.com/economic-calendar/
Forex Factory www.forexfactory.com/calendar.php
Bloomberg www.bloomberg.com
+various statistics websites and central bank websites for verification

Article Source: http://www.econgrapher.com/30aug-calendar.html

Top 5 Economics Graphs of the Week - 31 July 2010

This week we look at the GDP numbers for Q2 from the US and South Korea. Then we look at the US consumer confidence and Case Shiller housing market data, and finish up with a look at inflation and unemployment in Japan, and New Zealand monetary policy.

1. US GDP
The US economy grew 2.4% SAAR in the second quarter (0.6% in normal terms), slightly below consensus 2.5%, and slower than the revised 3.7% in Q1. On an annual basis GDP is up 3.2% vs 2.4% in Q1. The main drivers of growth were residential investment, investment in equipment & software, and inventories; the main detractor was (surprise, surprise) a shrinking of net exports. So overall not a bad result, but probably as good as it gets for now, especially given where much of the US data points are at, there are several indicators (as well as underlying fundamentals e.g. weak housing market) that will make the second half a lot harder. So rumors about the potential for more easing both on the fiscal and monetary policy fronts may end up validated in the second half of this year... watch this space.

2. South Korea GDP
The South Korean economy grew 1.5% in the second quarter, slower than the 2.1% recorded in Q1, but above consensus of 1.1%. On an annual basis GDP was up 7.2%, off slightly from 8.1% in Q1, but also above consensus 6.6%. The expansion was driven by strong export-led manufacturing activity and facility investment, but the construction sector was a detractor (driven by a sluggish domestic real estate market). The continued expansion will likely spur the Bank of Korea to raise interest rates again (having increased 25bps to 2.25% early this month). But like all trade driven economies, the Republic of Korea will be closely exposed to the fortunes of the global economy in the second half.

3. US Housing market and Consumer Confidence
US consumer confidence fell again in July to 50.4 vs consensus 51.0 and previous 52.9. The drop was led by a fall in the expectations component. On the housing front, the May reading of the S&P Case-Shiller 20-city home price index showed a 3.9% rise year on year (vs 4.1% in April), and a 0.5% monthly gain (vs 0.6% in April). The residual impact of the tax credits continued to underpin house prices. But going into the second half of 2010, the theme of 'this is as good as it gets' will likely ring true in the housing market space also. The fundamentals point to sideways movement at best, and a fall at worst. Unemployment is still high, debt levels compared to house prices are still too high, consumers are still hurting, and interest rates are probably - if anything - going to rise, so this bit remains a key vulnerability for the US economic recovery.

4. Japan unemployment and deflation
Japan saw a slight easing of deflation on a headline CPI basis, with the annual rate at -0.7% in June vs -0.9% in May, on a core basis the rate also reduced slightly to -1.0% vs -1.2% in May and consensus for -1.1%. So on the deflation front there has been cause for at least a bit of hope with recent trends. On the unemployment side though, the jobless rate rose to 5.3% from 5.2% in May, but there were some positives in the data with payrolls rising 40k in June, vs a fall of -240k in May. The job offer to job seeker ration rose slightly to 0.52 in June from 0.50 in May. So signs are tentatively that inflation and employment are gradually starting to catch up with the trade-driven rebound of economic activity in Japan, but the serious deflation and government debt problems still remain, as do the global vulnerabilities.

5. New Zealand monetary policy
The RBNZ (Reserve Bank of New Zealand) increased the official cash rate at its July meeting 25bps to 3.00%, and signaled that further rate rises will likely be on the go-slow. The bank noted that policy normalization may be more moderate going forward, but of course with the caveat of monitoring the economic environment and financial market developments. The New Zealand economy is in recovery mode and is growing, but is still dealing with the damage from the global financial crisis and the deep recession; as well as a spate of finance company collapses, beginning prior to the crisis and still continuing (the banking system remains firmly intact though, as none of the finance companies were particularly systemically important - but a lot of investors got burned). So, in spite of a projected short term (mainly artificial) spike in inflation, the outlook is for a few more interest rate rises this year, as appropriate.

Summary

So we've got the US economy showing another quarter of growth, but a little slower, and the potential to slow even further in the second half. There's also the key vulnerability of the US housing market, and the lingering damage of the crisis on the US consumer.

In Korea, the economy is still going strong, albeit a little slower, and this is likely to result in a couple more interest rate rises. But the Korean economic recovery has been driven exports, thus the recovery remains exposed to trends in international trade. Likewise Japan is starting to see improvements in its employment and deflation situation as the economy recovers with the help of rising trade.

In New Zealand the same theme of global vulnerabilities shows through, but for the most part on the domestic front the recovery is reasonably in tact and both GDP, inflation and monetary policy look fairly predictable in the second half of this year - holding all else constant.

Sources
1. US Bureau of Economic Analysis www.bea.gov
2. OECD Statistics stats.oecd.org/index.aspx
3. Standard & Poors www.standardandpoors.com & Conference Board www.conference-board.org
4. Trading Economics www.tradingeconomics.com
5. Reserve Bank of New Zealand www.rbnz.govt.nz

Article Source: http://www.econgrapher.com/top5graphs31jul.html

US Housing and Confidence Review

Similar story to last time, US consumer confidence in July fell worse than expected. The conference board index, designed to measure consumer attitudes on present economic conditions and expectations of future conditions, came in at 50.4 vs consensus for 51.0 and previous of 52.9. The drop was led by a fall in the expectations component with that sub-index falling to 66.6 from 72.7 in June, meanwhile the present situation sub-index fell to 26.1 from 26.8. Overall the index is being held down by a poor labor market, and still tough economic conditions.


Over to the housing front, the May S&P Case-Shiller home price index on the 20-city side showed a 3.9% rise year on year (vs 4.1% in April), and chalked up a 0.5% monthly gain (vs 0.6% in April). The 10-city index showed a 1.2% gain month on month (previous 0.7%), and 5.4% year on year (previous 4.6%). Much of the year on year gains are simply driven by the low base comparator, but there is also the fact that the 3-month moving average aspect captures some of the tax credit effect. As you can see in the chart below, the nascent rebound will surely descend into a double dip of sorts - of course it will not be as severe, but there will not be sustained house price increases until the fundamentals are there to sustain and support it.


So what do these data points collectively point to? The obvious first; things are still not good, the house price slump is miles from being recouped - indeed, the recent rebound we're seeing could well give way to a housing double dip, given there are no real fundamentals to support a sustained price increase. On consumer front, obviously people are affected by the housing market (and of course vice versa!), consumer confidence is being held down by the stagnant housing market, the feeble labor market (with persistently high unemployment), and of course austerity imperative - not only on the government front, but on the personal front. Austerity is the name of the game, because who know what will come next!

Sources
Econ Grapher Analytics www.econgrapher.com
Conference Board www.conference-board.org
Standard & Poors www.standardandpoors.com

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