Selected Key Developments Since June 4th

June 10, 2009

The U.S. jobless rate increased by another half percentage point in May to 9.4%, most since August 1983.  However, jobs fell 345K last month, much less than forecast, and the job losses for March and April were cut by a combined 82K to 578K per month.

The Canadian labor survey yielded a 0.4 percentage point increase in unemployment to 8.4%, along with a 41.8 drop in total jobs and a 58.7K reduction in full-time workers.  Wage growth slowed from 4.3% in the year to April to 3.4% y/y in May, least in two years.  Canadian housing starts jumped 9.2% between April and May, a better result than anticipated, and a 5.4% decline of building permits was a smaller drop than forecast.  Canada’s IVEY-PMI relapsed to 48.4 in May from 57.7 in April.

Peru’s central bank sliced its key interest rate by 100 basis points for a third straight month, bringing the total drop since the start of February to 350 basis points from a prior cyclical peak of 6.5%.

In released German data,

  • Exports and imports posted monthly drops in April of 4.8% and 5.8% and yearly declines of 28.7% and 22.9%.
  • The current account was 47% smaller in April than May.
  • Industrial production fell 1.9% in April and posted a 12-month decline of 21.6%.  A monthly rise of 0.5% had been forecast.  Factory output slumped 2.9% and 24.1% y/y.
  • Industrial orders were unchanged in April and 33.2% smaller than in April 2008.  Domestic and foreign orders for capital goods respectively dropped by 3.5% and 5.1% between March and April.  Overall orders were already 2.8% lower than their first-quarter average.

The French trade deficit narrowed 12% in April despite a 1.7% drop in exports.  The Bank of France projects a 0.5% drop in GDP this quarter and reported a greater-than-expected 6-point improvement of business sentiment to 81 in May.

British producer output prices rose 0.4% m/m but slid 0.3% y/y, roughly as expected.  The core 12-month rate of PPI-O inflation halved to 1.2%.  Producer import prices plunged 9.4% in the year to May.  The British Retail Consortium reported a 0.8% drop in same-store sales and a 0.8% rise in total sales. In two measures of housing prices, the DCLG reported a 12-month drop of 13% in April, but the RICs gauge was at its highest level since November 2007.

Swiss consumer prices fell 1.0% in the year to May.

Japan released several indicators:

  • M1, M2, and M3 posted on-year increases in May of 0.7%, 2.7%, and 1.8%.  Bank loans went up 3.3%.
  • The Economy Watchers index, a gauge of service sector activity, rose to 36.3 in May from 34.2 in April.
  • Core private machinery orders fell 5.4% in April, more than three times as much as forecast. Foreign machinery orders dived 21.5%.
  • Domestic corporate goods prices fell by a greater 5.4% in the year to May.  Import prices dropped 28.5%.
  • The index of leading economic indicators had a diffusion index of 55, highest since mid-2007.
  • The current account surplus (Y631 billion0 in April was 54.5% smaller than a year earlier.  Exports plunged 40.6%.
  • The Basic Balance (current account plus long-term capital) generated a Y 3.37 trillion surplus in April.
  • Stock and bond transactions generated a Y 2.41 trillion outflow.

CPI inflation in the Philippines slowed sharply to 3.3% in May from 4.8% in April.  Chinese consumer prices dropped 1.5% in the year to May and were 0.8% lower in January-April than a year earlier.

In Australia, business conditions fell four points to minus 14, while business sentiment rose a dozen points to minus 2.  Consumer confidence leaped 12.7% in June, the biggest monthly improvement in 22 years.

Brazilian GDP contracted 3.3% at a seasonally adjusted annual rate last quarter.

Oil prices rose another 2.9% and move above $70, more than a twofold advance from the low in 1Q09.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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