The International Monetary Fund (IMF) is planning to cut its U.S. growth forecast for this year due to higher taxes and spending cuts, Italian news agency ANSA said, citing a draft of the IMF`s next World Economic Outlook report. The U.S. economy, the world`s biggest, will expand 1.7 percent this year, down from the 2.0 percent predicted in January, ANSA reported. The next round of IMF forecasts is scheduled to be published in mid-April.
Higher tax rates for wealthy Americans and $85 billion in government spending cuts known as the "sequester" are slowing growth this year, but the U.S. economy will still expand 3 percent in 2014 as previously forecast, the draft report said, according to ANSA.
The world economy will expand 3.4 percent in 2013, down from a previous forecast of 3.5 percent, and Japan will grow 1.5 percent, up from 1.2 percent previously, the report said. In 2014, Japan will expand 1.1 percent compared with 0.7 percent previously, and the UK will grow by 1.8 percent, down from 1.9 percent in the last forecast, it added.
Forecasts for the main euro zone countries and for the euro zone as a whole were unchanged from January, according to the report, which cited Italian political uncertainty and tighter fiscal policy in the United States as risks to growth. Italian elections held a month ago gave no single group a working majority in parliament, leaving the euro zone`s third-largest economy in limbo as the bank crisis in Cyprus renews fears of an outbreak of market turmoil in the currency bloc.
The global economy is facing "new risks and old perils persist," the IMF draft report said, according to ANSA, adding: "in the short term key risks are related to developments in the euro zone, including the uncertainty tied to the results of the Italian elections, and to budget policy in the U.S."
Despite the fiscal head winds of higher payroll taxes and government spending cuts, the U.S. economy is set to grow 3.5% in the first quarter of 2013, according to a new forecast that was published by the Organization for Economic Cooperation and Development, a group of mainly advanced economies.
The latest OECD forecast sees U.S. GDP growth in the second quarter slipping back to 2% as fiscal spending cuts weigh on the economy. Still, the near-term outlook for the U.S., as well as some other major economies, has brightened in recent weeks.
The OECD predicted that Japan`s economy, the world`s third largest, would expand 3.2% in the first quarter, thanks to fiscal and monetary stimulus. Germany, the fourth-biggest economy, is expected to rebound as well, with its GDP advancing 2.3% in the first quarter, even as several other major Eurozone countries remain stuck in the mud. China, the world`s second-largest economy behind the U.S., is likely to grow well above 8% in the first half of this year, the OECD said.
Economy of the United States
The picture of the American economy has improved -- looking forward and backward. Economic output in last year`s fourth quarter was revised slightly higher, putting the nation`s growth rate for all of 2012 at a modest 2.2%.
The Commerce Department said that U.S. gross domestic product, or total goods and services produced, expanded at an annual rate of 0.4% in the fourth quarter, after adjusting for inflation. That is down from 3.1% in the third quarter, but better than the 0.1% real GDP growth in the government`s previous estimate of fourth-quarter activity.
The weakness in the fourth quarter output was exaggerated by an unusually big drop in federal defense spending and a sharp reduction in inventory accumulation. Real personal spending actually picked up a bit in the fourth quarter, and housing and nonresidential investments both saw strong gains.
Corporate profits grew by a healthy 2.3% in the fourth quarter from the previous quarter. And consumers` after-tax incomes surged at year`s end along with dividend and bonus payments, ahead of expected tax increases, the Commerce data show. Since the recovery officially began in mid-2009, the underlying growth rate of the economy has been a little above 2%, considered by many economists as sluggish given the deep recession.
Industrial production in the U.S. increased by more than economists had been expecting in the month of February, according to a report released by the Federal Reserve. The Fed said industrial production rose by 0.7 percent in February after coming in unchanged in January. Economists had expected production to increase by 0.5 percent. The report also said that the capacity utilization rate rose to 79.6 percent in February from a revised 79.2 percent in January.
Due to a big jump in oil imports and slump in exports, the U.S. trade deficit widened in January to $44.4 billion. The Commerce Department said the deficit rose by 16.5 percent from December. U.S. exports dropped 1.2 percent to $184.5 billion, reflecting declines in sales to Europe, China, Japan and Brazil. Imports rose 1.8 percent to $228.9 billion as oil imports surged 12.3 percent.
Yet despite the wider deficit in January, economists still believe the deficit this year will narrow slightly, in part because of continued gains in U.S. energy exports. A narrower trade gap boosts growth because it means U.S. companies are earning more from overseas sales while U.S. consumers and businesses are spending less on foreign products.
The deficit for all of 2012 was revised down slightly to $539.5 billion, a drop of 3.6 percent from 2011. The January deficit was running at an annual rate of $533.4 billion.
A spike in gas prices drove a measure of U.S. consumer costs up in February by the most in more than three years. But outside the gain in fuel costs, inflation was mostly modest. The consumer price index increased a seasonally adjusted 0.7 percent last month from January, the Labor Department said. It was the biggest monthly rise since June 2009.
Still, three-fourths of the increase in the index reflected a 9.1 percent surge in gas prices. That was also the largest monthly gain since June 2009. Gas prices had fallen in the previous four months. Since last month`s increase gas price have started to decline again. For the 12 months that ended in February, prices increased 2.0 percent. That`s in line with the Federal Reserve`s inflation target.
Excluding volatile food and energy costs, core inflation rose just 0.2 percent in February. Over the past 12 months, core prices have risen just 2 percent. In February, total energy costs rose 5.4 percent. In addition to gasoline, prices for natural gas and home heating oil also showed big gains. Food prices grew just 0.1 percent. Prices for fruits and vegetables jumped 1.4 percent jump. Meat, poultry and fish prices increased 0.5 percent. Most other food prices declined. Prices for new cars fell 0.3 percent, the largest monthly decline in three years. Airline fares and clothing prices also fell. Monthly rents and used car prices increased.
The U.S. economy added an estimated 88,000 jobs in March, fewer than had been expected but still enough to push down the national unemployment rate to a four-year low, according to figures released by the U.S. Bureau of Labor Statistics. The U.S. unemployment rate edged downward to 7.6 percent in March from 7.7 percent in February, the BLS says. That`s the nation`s lowest monthly jobless rate since December 2008.
However, job gains in March fell short of expectations. Economists surveyed by Bloomberg had anticipated a net gain of 190,000 jobs last month following February`s revised addition of 268,000 jobs. The private sector added 95,000 jobs last month, while government shed 7,000 positions.
According to the BLS, payrolls swelled in professional and business services, health care, food services and construction, but employment declined in the retail sector. The overall labor force fell by 496,000 for the month.
Economy of the European Union
GDP fell by 0.6% in the euro area (EA17) and by 0.5% in the EU27 during the fourth quarter of 2012, compared with the previous quarter, according to second estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2012, growth rates were -0.1% and +0.1% respectively. Compared with the same quarter of the previous year, GDP fell by 0.9% in the euro area and by 0.6% in the EU27 in the fourth quarter of 2012, after -0.6% and -0.4% respectively in the previous quarter. Over the whole year 2012, GDP fell by 0.6% in the euro area and by 0.3% in the EU27.
In January 2013 compared with December 2012, seasonally adjusted industrial production fell by 0.4% in both the euro area (EA17) and the EU27, according to estimates released by Eurostat, the statistical office of the European Union. In December 2012 production grew by 0.9% and 0.8% respectively. In January 2013 compared with January 2012, industrial production decreased by 1.3% in the euro area and by 1.7% in the EU27.
In January 2013 compared with December 2012, production of durable consumer goods fell by 1.4% in the euro area and by 0.4% in the EU27. Capital goods decreased by 1.2% in both zones. Production of energy dropped by 1.0% in the euro area and by 1.2% in the EU27. Intermediate goods rose by 0.1% in the euro area and fell by 0.1% in the EU27. Non-durable consumer goods increased by 0.9% and 1.3% respectively. Among the Member States for which data are available, industrial production fell in nine and rose in nine. The largest decreases were registered in Finland (-4.1%), Luxembourg (-3.8%) and Latvia (-3.5%), and the highest increases in Lithuania (+4.4%), Denmark (+4.3%) and Portugal (+3.5%).
In January 2013 compared with January 2012, production of durable consumer goods fell by 5.5% in the euro area and by 4.3% in the EU27. Intermediate goods dropped by 3.1% and 3.4% respectively. Capital goods decreased by 2.6% in both zones. Production of energy increased by 0.9% in the euro area and remained stable in the EU27. Non-durable consumer goods rose by 3.1% and 2.2% respectively. Among the Member States for which data are available, industrial production fell in eleven and rose in seven. The largest decreases were registered in Sweden (-5.9%), Finland (-5.4%), Greece and Spain (both -5.0%), and the highest increases in Bulgaria and Lithuania (both +8.0%) and Estonia (+5.5%).
The first estimate for the euro area (EA17) trade in goods balance with the rest of the world in January 2013 gave a 3.9 billion euro deficit, compared with -9.1 bn in January 2012. The December 2012 balance was +10.8 bn, compared with +8.0 bn in December 2011. In January 2013 compared with December 2012, seasonally adjusted exports rose by 2.0% and imports by 3.1%. These data are released by Eurostat, the statistical office of the European Union.
The first estimate for the January 2013 extra-EU27 trade balance was a 16.5 bn euro deficit, compared with -24.9 bn in January 2012. In December 2012 the balance was -1.1 bn, compared with -0.2 bn in December 2011. In January 2013 compared with December 2012, seasonally adjusted exports rose by 2.9% and imports by 1.3%.
Euro area annual inflation is expected to be 1.7% in March 2013, down from 1.8% in February, according to a flash estimate from Eurostat, the statistical office of the European Union. Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in March (2.7%, stable compared with February), followed by services (1.9% compared with 1.5% in February), energy (1.7% compared with 3.9% in February) and non-energy industrial goods (1.0% compared with 0.8% in February).
The euro area (EA17) seasonally-adjusted unemployment rate was 12.0% in February 2013, stable compared with January. The EU27 unemployment rate was 10.9%, up from 10.8% in the previous month. In both zones, rates have risen markedly compared with February 2012, when they were 10.9% and 10.2% respectively. These figures are published by Eurostat, the statistical office of the European Union.
Eurostat estimates that 26.338 million men and women in the EU27, of whom 19.071 million were in the euro area, were unemployed in February 2013. Compared with January 2013, the number of persons unemployed increased by 76 000 in the EU27 and by 33 000 in the euro area. Compared with February 2012, unemployment rose by 1.805 million in the EU27 and by 1.775 million in the euro area.
Among the Member States, the lowest unemployment rates were recorded in Austria (4.8%), Germany (5.4%), Luxembourg (5.5%) and the Netherlands (6.2%), and the highest in Greece (26.4% in December 2012), Spain (26.3%) and Portugal (17.5%).
Compared with a year ago, the unemployment rate increased in nineteen Member States and fell in eight. The highest increases were registered in Greece (21.4% to 26.4% between December 2011 and December 2012), Cyprus (10.2% to 14.0%), Portugal (14.8% to 17.5%) and Spain (23.9% to 26.3%). The largest decreases were observed in Latvia (15.6% to 14.3% between the fourth quarters of 2011 and 2012), Estonia (10.8% to 9.9% between January 2012 and January 2013) and Ireland (15.1% to 14.2%).
Economy of Japan
Japanese gross domestic product was flat in October-December from the previous quarter, government data showed, revised up slightly from a preliminary estimate, suggesting that the economy is slowly crawling out of a mild recession. The reading compared with a median forecast of economists for 0.1 percent quarter-on-quarter growth, and an initial estimate of a 0.1 percent contraction, due to an upward revision to private capital spending, the revised Cabinet Office data showed.
That translated into annualised growth of 0.2 percent in price-adjusted real terms, matching an average forecast of economists and compared with an initial reading of a 0.4 percent contraction, the data showed.
Japan`s fourth-quarter growth figures compared with an annualised 0.1 percent expansion in the United States in the same period, and a 2.3 percent annualised contraction in the 17-country euro zone. Economists expect the Japanese economy, the world`s third largest, will grow moderately this year on the back of a global economic recovery and Prime Minister Shinzo Abe`s expansionary policy mix of monetary and fiscal stimulus.
Japanese industrial production fell on month in February and core consumer prices continued to fall nationwide, government data showed, a sign that hurdles remain for Prime Minister Shinzo Abe as he tries to fire up growth in the world`s third-largest economy. Industrial output was down 0.1% in February from the previous month, far worse than the 2.5% increase expected by economists surveyed by Dow Jones Newswires and the Nikkei.
The main reason for the fall in output was a 5.0% decline on month in the production of electronic parts and devices on weak smart-phone demand and sluggish manufacturing in China, a METI official briefing reporters on the data said. Companies expect output to rise 1.0% on month in March, and increase 0.6% in April, according to a survey of manufacturers released with the data.
Japan`s merchandise trade deficit in February narrowed from its record pace in the previous month, the Ministry of Finance said, amid hopes that a weaker yen and a global economic recovery will revive Japan`s long-suffering export industries.
The merchandise trade balance came to a deficit of 777.5 billion yen ($8.1 billion) in January, down from Y1.630 trillion in January, extending the run of deficits to an eighth straight month, the longest spell since 1980. The deficit was slightly smaller than a median forecast of Y876 billion expected in an survey of economists by the Nikkei and Dow Jones Newswires.
Exports fell 2.9% on year to Y5.284 trillion, as exports to China plunged 15.8% due in part to the Lunar New Year holiday. Meanwhile, the weaker yen sent overall imports soaring 11.9% on year to Y6.061 trillion, as imports of natural gas--the main fuel for Japanese power plants--stayed near record levels for the second straight month.
Core consumer prices in Japan were down 0.3 percent on year in February, the Ministry of Internal Affairs and Communications said - beating forecasts for -0.4 percent after showing -0.2 percent in January. Overall CPI in Japan plummeted 0.7 percent on year - in line with forecasts after dipping 0.3 percent in the previous month. On month, core CPI added 0.1 percent and overall inflation lost 0.2 percent.
Japan`s Ministry of Internal Affairs and Communications said that unemployment rate edged up to 4.3% in February from the previous month, the government said. But the number of unemployed people dropped by 120,000 from a year earlier to 2.77 million, falling year-on-year for the 33rd consecutive month, the ministry said in a statement relayed by Kyodo news agency.
Retailers and wholesalers saw a decrease of 210,000 to 10.41 million people and manufacturers also lost 370,000 jobs to employ 10.28 million, the ministry said. The proportion of temporary and part-time workers in the labour force hit a record high in 2012 of 35.2% for the third consecutive year of increase, the ministry said in mid-February.
Meanwhile, the Ministry of Health, Labour and Welfare said that availability of jobs, measured as a ratio of job offers per job seekers, was flat at 0.85 in February.
Economy of Russia
Russia`s gross domestic product slowed to 3.4% in 2012 from 4.3% the previous year, the Federal Statistics Service reiterated in its second GDP estimate. The figure is slightly below the preliminary estimate from the economy ministry, whose deputy head said in January the country`s GDP probably expanded around 3.5% in 2012.
Russia`s economic expansion is slowing after a decade of rapid growth before 2009. Central bank and finance ministry officials have said sluggish growth is the most the country can achieve without bold economic reforms. While President Vladimir Putin has urged the government to target a 5% economic growth rate, the government expects growth this year to be just a notch higher than last year.
Russia`s GDP growth eases to 2.1% y/y in Q4, soft across the board. Russia`s GDP edged up 0.1% in Feb. from a year ago, slowing from 1.6% growth in Jan., on weaker exports. On a monthly basis, output contracted 0.1%.
Russian industrial output shrank in February, contracting by the most in more than three years as mining and utilities production weakened. Output dropped 2.1 percent from a year earlier, when February had 29 days, after a 0.8 percent contraction in January, the Federal Statistics Service in Moscow said. Output dropped 2.1 percent from a year earlier, when February had 29 days, after a 0.8 percent contraction in January, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 19 economists in a Bloomberg survey was a for a 1 percent contraction. Mining contracted 2.2 percent after a 1.2 percent drop in January, the statistics service said. Output at utilities fell 10 percent after a 1.8 percent gain the previous month, while manufacturing fell 0.1 percent, improving from a 0.3 percent decline.
Russia`s monthly consumer price increase halved in March from February and inflation eased in annual terms, supporting calls for a monetary easing that could aid economic growth.
Headline year-on-year inflation eased to 7.0 percent in March from 7.3 percent a month earlier, while month-on-month consumer prices rose 0.3 percent - half the February pace - data from the Federal Statistics Service showed.
The unexpectedly favorable outcome increases pressure on the central bank to cut start cutting key interest rates. Lowering rates, some government officials argue, would support lending to the industrial sector and boost growth.
Differentiation between the levels of unemployment in Russia`s federal districts remains strong - the gap in the districts can surpass four-fold and in the regions 40-fold, the Federal State Statistics Service Rosstat said in a report on employment and unemployment in February.
The lowest level of unemployment, in accordance with ILO criteria, was in the Central Federal District at 3.3 percent, while the highest was in the North Caucasus Federal District at 13.7 percent.
Unemployment levels in February were 4.6 percent in the North West Federal District (FD), 5.2 percent in the Volga FD, 6 percent in the Urals FD, 6.9 percent in the Far East FD, 7.2 percent in the Southern FD and 7.6 percent in the Siberian FD.
Unemployment in Russia overall was 5.8 percent in February, compared to 6 percent in January and 5.3 percent in December. Among the regions with the highest levels of unemployment in December 2012 to February 2013 (on average for the three months for increased data representation) were Ingushetia (46.9 percent) and Chechnya (27.1 percent). There was also high unemployment in Tuva (15 percent), Kalmykia (14.5 percent), Dagestan (12.5 percent), Altai (11.6 percent) and Transbaikal (10.7 percent).
The lowest levels of unemployment in December-February were in St. Petersburg (1.1 percent), Moscow (1.2 percent), the Moscow region (3 percent), and the Samara and Magadan regions (3.2 percent in each).
Обновлено (21.04.2013 22:12)