Thursday, the Statistical Service of the Republic of Slovenia announced that the import price index increased 0.4% on an annual basis in December, compared to the 2.1% fall in the previous month.
At the same time, prices of products supplied from the euro area rose 0.3% and import price from the non-euro area grew 0.8%.
On a monthly basis, import prices climbed 0.1% in December, after falling 0.4% in November.
Retail sales in Japan climbed 2.6 percent in January compared to the previous year, the Ministry of Economy, Trade and Industry said on Friday, rising for the first time in 17 months.
That was sharply higher than analyst expectations for a 0.2 percent decline following the revised 0.2 percent contraction in December.
Sales from large retailers fell 4.6 percent on year, matching both the forecasts and the rate of decline from the previous month.
On a monthly basis, retail sales surged by a seasonally adjusted 2.9 percent versus forecasts for a 0.3 percent increase after the 1.1 percent contraction in December.
Italian manufacturing confidence increased for the fifth consecutive month in February, economic think tank ISAE said on Thursday.
Manufacturers' confidence indicator rose to 84 in February from 83.2 in January. This was the highest level since June 2008. Economists expected an increase to 83.6.
According to the think tank, all sub-indicators of the manufacturing sentiment index did not improve in February. The index for intermediate goods increased to 82.9 from 80.4 in January, while confidence indicator on goods investment and consumption fell to 78.9 from 79.1.
Friday, Moody's Investors Service said that the breakdown in the talks between the governments of Iceland, the United Kingdom and Netherlands to resolve the Icesave dispute added downward pressure on the Icelandic government's Baa3 rating.
Moody's assessed that the failure to reach a new agreement would possibly lead to an extended delay of the IMF programme and a weaker economic recovery. According to Moody's, Iceland's path out of the crisis appears more difficult.
The renewed talks to reach a new agreement on Icesave were required because intense popular opposition to the earlier arrangement had prompted Iceland's President to refuse to sign the legislation in early January, Moody's said. The Icelandic government announced that it will hold a referendum on the previous agreement on March 6. However, the rating agency said opinion polls suggest that the agreement will be voted down by a wide margin.
"A rejection of the agreement would also prolong the uncertainty surrounding the economic and political outlook, and threaten to derail the nascent recovery," said Kenneth Orchard, Vice President - Senior Credit Officer in Moody's Sovereign Risk Group. The rating agency added that government's budget deficit and debt affordability indicators are among the worst of any investment grade-rated sovereign.
Thursday, the Hong Kong Monetary Authority said in a report that the new mortgage loans drown down decreased 11.8% month-on-month in January, compared to a 5.8% fall in the previous month.
The value of new mortgage loans drown down amounted to HK$17.3 billion in January, down from HK$19.7 billion in the previous month.
Meanwhile, new loans approved increased 22.3% to HK$29.6 billion in January, compared to the 6.2% fall in the previous month.
Germany's net borrowing of general government stood at EUR 79.3 billion in 2009, which was 3.3% of gross domestic product, the Federal Statistical Office said on Wednesday.
The net borrowing of central government amounted to EUR 39.6 billion, while the state government net borrowing was EUR 20.2 billion. The net borrowing for local government was EUR 7.5 billion and the social security funds for EUR 12.1 billion.
Net borrowing is calculated as the difference between revenue and expenditure of general government.
New home sales unexpectedly showed a substantial decrease in the month of January, according to a report released by the Commerce Department on Wednesday, with sales falling for the third consecutive month.
The report showed that new home sales fell 11.2 percent to an annual rate of 309,000 in January from the revised December rate of 348,000. Economists had expected sales to rise to 354,000 from the 342,000 originally reported for the previous month.
Friday, the Statistical Office of the Slovak Republic announced that the harmonized index of consumer prices or HICP dropped 0.2% on an annual basis in January, compared to a flat reading in the previous month. This was the lowest value in the history of the HICP.
On a monthly basis, the HICP rose 0.1% in January, after falling 0.1% in December.
Friday, the Statistics Estonia announced the trade deficit amounted to EEK 12.8 billion in 2009, which was threefold smaller than the previous year. In 2008, the trade deficit was EEK 37.59 billion.
In 2009, exports decreased 24% to EEK 101.3 billion from the previous year, while imports declined to EEK 114.1 billion.
In December, the trade deficit stood at EEK 1.67 billion, widening from EEK 1.31 billion in November. Exports dropped 1% on an annual basis to EEK 8.56 billion, while imports fell 13% to EEK 10.14 billion.
House prices in the U.K. fell 1% month-on-month in February, the Nationwide Building Society said Friday. That was the first fall in ten months. Economists had forecast 0.4% rise following a revised growth of 1.4% in January.
House prices increased 9.2% on an annual basis in the month, faster than the 8.6% rise recorded in January. But, missed economists' expectations for an 11% rise.
The relatively smoother three month on three month rate of house price inflation stood at 1.6%, down from 2% in January and from a peak of 3.7% in September 2009.
The average price of a typical property sold in the U.K. during February was GBP 161,320.
Wednesday, the Department of Statistics Malaysia announced that the consumer price index or CPI rose 1.3% year-on-year in January, faster than the 1.1% growth in the previous month. Economists were looking for an increase of 1.5%.
Food and non-alcoholic beverages prices climbed 1.2% on an annual basis in January, while clothing and footwear prices fell 0.7%. Transport charges were up 0.7%.
On a monthly basis, the CPI increased 0.2% in January, same as in the previous month.
Brazil's seasonally adjusted consumer confidence index stood at 110.2 in February, down from 112.7 in January, a report from Getulio Vargas Foundation or FGV showed on Wednesday.
The current situation index dropped to 123.6 in February from 124.6 in January, while the expectation index fell to 103 from 106.2. The family's financial situation improved in February, but the expectations for the next six months became less optimistic, the FGV said.
On an unadjusted basis, the consumer confidence stood at 111 in February, down from 116.4 in January.
U.K.'s service sector output rose 0.6% month-on-month in December, faster than the 0.2% rise in November, data released by the Office for National Statistics showed Friday.
All five components of the index of services contributed positively, with the largest contribution from the distribution sector.
On an annual basis, service sector output fell 1.4% after decreasing 2.3% in November. Output fell for a fourteenth consecutive month in December.
In the three months to December, output fell 2.5%, slower than a 3.3% decline in the three months to November. On a sequential basis, service sector output climbed 0.5% in the three months to December, faster than the 0.1% rise in the three months to November.
Wednesday, Macau's Statistics and Census Service announced that the consumer price index or CPI rose 0.12% year-on-year in January, slower than the 0.78% growth in the previous month.
Food and non-alcoholic beverages prices rose 3.60% on an annual basis in January, while clothing and footwear prices climbed 9.95%. Transport charges were up 6.99%.
On a monthly basis, the CPI dropped 0.03% in January, compared to the 0.61% increase in the preceding month.
For the 12 months ended in January, the average composite CPI rose by 0.71% over the preceding period.
Czech economic sentiment rose for a sixth straight month in February, survey data released by the statistical office showed Wednesday.
The composite indicator that measures overall economic sentiment rose to 88.8 in February from 86.7 in January. The consumer confidence indicator climbed to 92.3 from 90.5. A measure for confidence in the business sector went up to 88.1 from 86.
Confidence brightened in the industrial sector. The corresponding indicator rose to 91.1 in February from 85.7 in January. Sentiment in the trade sector climbed to 84.5 from 84.
Meanwhile, there were slight declines in sentiment indicators for the construction and service sectors. A measure for construction confidence fell to 68.7 from 73.4 and the services confidence indicator slipped to 87.8 from 88.
Yuan's exchange rate is not the main reason for the problems in the U.S. and global economic imbalances, a Commerce Ministry official said Thursday, denying Washington's criticism.
"RMB foreign exchange rate is neither the root of trade imbalance between China and the United States, nor the main cause of the world economic imbalance," Xinhua News Agency quoted Commerce Ministry spokesman Yao Jian.
He blamed that such an accusation lack basic judgment. Yao reaffirmed that a stable yuan would support in stabilizing the global financial market.
The U.S and the European Union have pressed China to strengthen its currency in order to bridge their trade gap with China.
The Indian economy grew 6% during October to December from the previous year, the Central Statistical Organization said Friday. The economic growth eased from 7.9% in the previous quarter. Economists had expected the annual growth rate to slow to 6.9%.
The manufacturing sector showed an annual increase of 14.3%, faster than the 9.2% growth in the prior quarter. Mining and quarrying grew 9.6% and construction rose 8.7%. Meanwhile, farm output was down 2.8%.
According to advance estimates released by the CSO on February 8, the Indian economy is set to grow 7.2% in the 2009-10 fiscal year. That was larger than the 2008-09 growth rate of 6.7%.
The euro fought back against the dollar on Friday as another round of disappointing US housing figures fueled concerns that the US economic recovery may peter out after robust growth in the last quarter of 2009.
Still, concerns about the Greek debt situation continued to plague the euro, limiting its move away from a recent 9-month low against the greenback.
Greece has pushed back its plans to sell a minimum $2 billion in global bonds in the US and Asia. Meanwhile, reports surfaced indicating that European Union officials are demanding that Greece urgently adopt another 4 billion euro worth of austerity measures.
The euro rose to 1.3660 versus the buck, more than two cents from a 9-month low seen last week.
However, the euro crept away from a yearly low against the yen, improving slightly to 121.40. The euro briefly touched below 120 yesterday.
The euro rose sharply to a monthly peak of .8970 against the broadly weaker sterling, which has been plagued by deepening concerns about the UK financial system.
Euro area annual inflation rose to 1% in January from 0.9% in December, Eurostat said in a final report released on Friday. With prices in check, the European Central Bank has a free hand to keep interest rates at low levels to support the struggling eurozone economy.
British consumer confidence improved for the second month in February, the results of a closely watched survey show.
House prices in the U.K. fell 1% month-on-month in February, the Nationwide Building Society said Friday. That was the first fall in ten months. Economists had forecast 0.4% rise following a revised growth of 1.4% in January.
Back in the US, sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year.
Looking back, economic activity in the fourth quarter expanded by more than previously expected, according to a report released by the Commerce Department on Friday, with the upward revision partly due to a smaller than previously expected drop in inventories.
The report showed that gross domestic product increased at an annual rate of 5.9 percent in the fourth quarter compared to the advance estimate of 5.7 percent growth.
The dollar ended a relatively strong week back on its heels Friday, failing to withstand yet another round of troubling news from the housing front.
While preliminary data showed the US economy grew at a robust rate in the fourth quarter, lingering weakness in the pivotal jobs and housing sectors threaten to derail the government-aided recovery.
Sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year. Existing home sales fell 7.2 percent in January compared to the previous month, according to a report released by the National Association of Realtors.
Looking further back, economic activity in the fourth quarter expanded by more than previously expected, according to a report released by the Commerce Department on Friday, with the upward revision partly due to a smaller than previously expected drop in inventories.
The report showed that gross domestic product increased at an annual rate of 5.9 percent in the fourth quarter compared to the advance estimate of 5.7 percent growth.
The dollar eased to 1.3680 versus the euro before firming up a bit in afternoon trading. With the retreat, the dollar pulled back from a recent 9-month high of 1.3444, which was challenged yesterday.
Meanwhile, the buck touched a 3-week low of 88.73 versus the yen, edging closer to last November's 1995 low near 85.
With policymakers in the US and EU unlikely to raise interest rates anytime soon, the yen has become a more attractive safe haven play in the past few weeks.
The dollar was not the weakest among majors on Friday, with that distinction held by the sterling. The dollar rose to a fresh 9-month high of 1.5150 amid concerns about the UK financial sector.
In economic news from overseas, euro area annual inflation rose to 1% in January from 0.9% in December, Eurostat said in a final report released on Friday. With prices in check, the European Central Bank has a free hand to keep interest rates at low levels to support the struggling eurozone economy.
British consumer confidence improved for the second month in February, the results of a closely watched survey show.
House prices in the U.K. fell 1% month-on-month in February, the Nationwide Building Society said Friday. That was the first fall in ten months. Economists had forecast 0.4% rise following a revised growth of 1.4% in January.
New York Federal Reserve President William Dudley said Friday that a financial conditions framework would be useful in evaluating the central bank's economic outlook and monetary policy.
Appearing on a panel at the University of Chicago Booth School of Business Annual U.S. Monetary Policy Forum in New York City, Dudley said that financial conditions would help dictate monetary policy and economic outlook because policy "works its magic through its effect on financial conditions."
"The level of the federal funds rate influences other financial market variables such as money market rates, long-term interest rates, credit spreads, stock prices and the value of the dollar, and it is these variables that influence real economic activity," he said.
The New York chief went on to say that the instable link between the federal funds rate at financial conditions indicators means that the indicators give extra information about economic activity and can be relevant in deciding the federal funds rate.
"The level and path of the fed funds rate matters, but it also matters how this gets transmitted to the real economy through the financial sector," he said.
Dudley said that economic events of the past decade, including the technology bubble and the 2008 financial crisis show that the federal funds rate is not good enough to assess monetary policy's impact on the economy, and added that the Fed has taken financial conditions into account in deciding monetary policy.
Dudley was on a panel discussing a paper - put together in part by former Fed governor Frederic Mishkin - which created a financial conditions index that takes into account data affecting firms outside the banking system.
"The paper's analysis of the many financial conditions indexes that have been constructed as proxies for overall financial conditions finds that many of these indexes have done better than the fed funds rate or other single-variable financial indicators as predictors of real economic activity," he said.
Friday morning, the Institute for Supply Management - Chicago released its report on regional manufacturing activity in the month of February, showing that its index of activity in the manufacturing sector unexpectedly increased.
The ISM - Chicago said its business barometer index rose to 62.6 in February from 61.5 in January, with a reading above 50 indicating growth in the manufacturing sector. The increase came as a surprise to economists, who had expected the index to slip to 59.7.
With the unexpected increase, the index rose to its highest level since April of 2005. The ISM - Chicago added that the index accelerated for the fifth straight month, a trend not seen since 2002.
The increase by the headline index came in spite of a slowdown in the pace of production and new orders growth, with the production index slipping to 65.2 in February from 66.6 in January, while the new orders index fell to 62.2 from 66.4 in the previous month.
The report also showed an acceleration in the pace of contraction in inventories, as the inventories index fell to 42.4 in February from 48.7 in January.
"Bottom line, the data confirms that manufacturing remains the source of our incipient recovery," said Peter Boockvar, equity strategist for Miller Tabak. "While some key components fell from January, they jumped from December."
With regard to inflation, the ISM - Chicago said the prices paid index rose to 67.7 in February from 66.2 in January, indicating a modest acceleration in the pace of price growth.
James Knightley, an economist at ING Financial Markets, noted, "In terms of the broader situation, today's figures follow other regional surveys such as the NY Empire, which rose to 24.9 from 15.9, and the Philadelphia Fed (rose to 17.6 from 15.2)."
"All in all this actually bodes well for the national ISM manufacturing report, due Monday," Knigthley added.
Next Monday, the Institute for Supply Management is due to release its national report on manufacturing activity in the month of February, with the index of activity in the sector expected to edge down to 58.0 from 58.4 in January.
Sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year.
This is the second major housing report this week to indicate that the sector remains in a serious slump, as lending remains tight and a large supply of potential foreclosures impacts the market.
Existing home sales fell 7.2 percent in January compared to the previous month, according to a report released by the National Association of Realtors. The figure came in at a seasonally adjusted annual rate of 5.05 million units - its lowest level in seven months.
January's decline followed a 16.2 percent plunge in December, which was the largest on record. A key tax credit had been scheduled to expire in November, which encouraged many buyers to get deals done before the deadline. This credit has since been extended, but the original deadline was a factor in the sharp drop off at the end of last year.
While the month-to-month figure showed a decline, sales did rise from the same period in 2009. Compared to last year, January's figure represented an 11.5 percent improvement.
Sales dropped throughout the country. The decline was led by a 10.9 percent slide in the Northeast. There were also drops of 7.4 percent in the South, 6.9% in the Midwest and 5.2 percent in the West.
Sales of single-family homes dropped 6.9 percent. The median sales price for homes was $164,700 in January. This was unchanged from last year.
The recent data suggested that foreclosures are playing a role in dampening the housing market - a point many experts have been making lately. The National Association of Realtors revealed that distressed sales made up 38 percent of sales in January. This was up from 32 percent in December.
Inventories of unsold homes edged down in January. The number slipped 0.5 percent to 3.265 million. This equates to a 7.8-month supply at current sales pace.
Earlier this week, a government report indicated that sales of newly built homes dropped 11.2 percent in January to an annual rate of 309,000. This was the slowest pace of sales since records began being kept in 1963.
U.S. economic activity in the fourth quarter expanded by more than previously expected, according to a report released by the Commerce Department on Friday, with the upward revision partly due to a smaller than previously expected drop in inventories.
The report showed that gross domestic product increased at an annual rate of 5.9 percent in the fourth quarter compared to the advance estimate of 5.7 percent growth. Economists had expected the pace of GDP growth to be unrevised.
With the upward revision, the pace of GDP growth showed an even more significant acceleration from the 2.2 percent growth seen in the third quarter and marks the fastest pace of growth since the third quarter of 2003.
The Commerce Department said that the bigger than previously expected increase primarily reflected upward revisions to private inventory investment, exports, and non-residential fixed investment.
However, the positive contributions were partly offset by an upward revision to imports and downward revisions to consumer spending and state and local government spending.
A smaller than previously expected drop in inventories played a big role in the upward revision, with private business inventories falling by $16.9 billion compared to the previously reported $33.5 billion decrease.
The revised drop in inventories marks a substantial slowdown from the $139.2 billion decrease reported for the third quarter.
Paul Ashworth, Senior U.S. Economist at Capital Economics said, "Inventories will continue to provide a strong boost to GDP growth in the first half of this year, as stocks start to grow rather than just shrink at a slower pace."
"But that boost will fade quickly in the second half," he added. "Once inventories are back at normal levels, that's it."
The report also showed a downward revision to pace of consumer spending growth, which was revised to 1.7 percent from the previously reported 2.0 percent growth. This marks a notable slowdown from the 2.8 percent growth seen in the third quarter.
On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy costs, rose at an annual rate of 1.6 percent in the fourth quarter, an upward revision from the 1.4 percent growth reported previously.
Lithuania's economic sentiment improved for a second month in February, as all of its sub-indicators except service sector confidence indicator recorded increases, survey data released by Statistics Lithuania showed Friday.
The economic sentiment indicator rose to minus 21 in February from minus 23 in January. The indicator has been showing a mixed picture in recent months.
Among its sub-indicators, the consumer confidence index rose to minus 40 from minus 45, suggesting a decrease in households' pessimism.
Industrial confidence indicator moved to minus 16 from minus 19 and construction sentiment index rose to minus 65 from minus 69. Confidence indicator for the retail sector increased to minus 29 from minus 33. Meanwhile, service providers' pessimism heightened, with the indicator rising to minus 7 from minus 3.
Macau's unemployment rate stood at 3% in the November to January period, down from 3.1% in the October to December period, the Statistics and Census Service reported on Friday.
In the three months ending January period, the total number of unemployed persons decreased by about 400 to 9,500, with 10% of the total being fresh labor force entrants searching for their frst job.
Analyzed by industry, the number of persons working in the manufacturing and restaurant sectors increased from the preceding period, while the number of people working in wholesale & retail trade registered a decrease.
Statistics New Zealand said on Friday the total number of dwelling approvals in January fell a seasonally adjusted 2.8% month-on-month, after falling 3.5% in December. This was wildly off expectations for a 2.2% increase.
Excluding the "volatile" apartments segment, the seasonally adjusted number of new dwellings authorized rose 0.7%, after falling 3.9% in December.
A total of 1,000 new dwellings and 42 new apartments were authorized in January.
The regions with the largest increases in dwelling consents were Canterbury, Auckland and Northland. On the other hand, dwelling consents in Marlborough, Tasman, Otago, Wellington, Gisborne, and West Coast decreased.
Singapore's visitor arrivals increased 17.6% on an annual basis to 908,000 in January, the Singapore Tourism Board or STB said on Friday. This was the highest recorded visitor arrivals in the month of January.
Visitor days, which was the total number of days that foreign visitors stayed in the country, climbed 8.7% annually to 3.6 million in January.
Meanwhile, revenue per available room increased 9.4% to SGD150 in January. This was the first annual growth in sixteen months. Average Occupancy Rate grew 13.9 percentage point to 80.4%.
Indonesia, China, Australia, Malaysia, and India were Singapore's top five visitor-generating markets, these markets accounted for 54% of total visitor arrivals in January, the STB said.
New Zealand's trade balance swung to a surplus of NZ$269 million in January from the NZ$32 million deficit in the previous month, Statistics New Zealand reported on Friday.
This marks the first trade surplus recorded in the country since May 2009. Analysts had expected a NZ$100 million deficit.
Exports dropped 0.6% annually to NZ$3.2 billion in January. Exports of casein & caseinates, cereals, flour, & starch, and meat & edible offal recorded large declines. On the other hand, exports of crude oil & milk powder, butter, and cheese recorded large rises.
At the same time, imports plummeted 11.9% to NZ$2.9 billion. Electrical machinery & equipment and mechanical machinery & equipment were the most significant contributors to the decline in imports.
Markit Economics reported on Thursday that the Japan Nomura / JMMA Manufacturing Purchasing Managers' Index stood at a seasonally adjusted 52.5 in February, unchanged from the previous month. A reading above 50 indicates expansion, while one below 50 suggests contraction.
Manufacturing output reported growth for the ninth straight month in February, with respondents attributing the rise in output to a greater inflow of new orders. New order levels were up for the eighth successive month, although the pace of growth was the slowest in the sequence.
Employment levels in the manufacturing sector fell further in February, albeit at only a marinal rate. Panelists cited restructuring efforts for cutting staff levels.
Industrial production in Singapore surged in January led by increased output in the electronics and pharmaceuticals sectors.
The Economic Development Board of Singapore said industrial output climbed 39.4% year-on-year in January, accelerating from the 14.6% increase in the previous month, and coming in well above analyst expectations for a 19.3% increase.
Production in the electronics sector grew 80.6% in January, adding to the 58.4% increase in the previous month. Among the segments, semiconductor showed the largest gain with a 105% spike.
Production in the biomedical manufacturing sector rebounded with a 48.4% increase. Pharmaceuticals output soared 51.1%, reversing the 16.4% slump a month ago.
Excluding the "volatile" biomedical manufacturing sector, industrial production climbed 36.2%.
On a monthly basis, industrial output climbed a seasonally adjusted 11.8% in January, adding to the 13.4% increase in the preceding month. Excluding biomedical manufacturing, output increased 0.8%.
Orders for manufactured durable goods showed a much bigger than expected increase in the month of January, according to a report released by the Commerce Department on Thursday, with the increase largely due to a substantial increase in orders for transportation equipment.
The report showed that durable goods orders increased by 3.0 percent in January following an upwardly revised 1.9 percent increase in December. Economists had expected orders to increase by 1.5 percent compared to the 1.0 percent growth originally reported for the previous month.
Excluding a 15.6 percent increase in orders for transportation equipment, however, durable goods orders fell by 0.6 percent in January compared to a 2.0 percent increase in the previous month. The decrease surprised economists, who had expected 1.0 percent growth.
Morale among South Korean manufacturers boomed to a seven-year high heading into March, figures released by the central bank show.
The Bank of Korea said the index of manufacturers' business survey index climbed to 101 in March from 92 in February. A reading above 100 means optimists outnumber pessimists.
This marks the first time that the business sentiment index has climbed above the benchmark 100 since the December quarter of 2002. It also marks the highest level in the index since the final quarter of 2002.
Meanwhile, a measure of confidence among non-manufacturers increased to 91 in March from 87 in February.
The Bank of Korea has kept its benchmark interest rate unchanged at a record-low 2.00% despite the economy avoiding a yearly contraction and growing 0.2% in 2009. The government has forecast 5% growth for this year.
The business confidence survey polled more than 2,000 manufacturers and non-manufacturers between February 16 and February 22.
Revised fourth quarter GDP results from the U.K. and inflation data from the eurozone are due on Friday, headlining a busy day for European economic news.
At 2:00 am ET, the Nationwide Building Society is scheduled to release house price data for the U.K. Economists expect house prices to rise 0.4% on a monthly basis in February, slowing from the 1.2% increase in the previous month.
Balance of payments statistics for December are due from the Bank of Spain at 3:00 am ET. A current account deficit of EUR 4.7 billion was recorded in November.
A flash estimate of the harmonized index of consumer prices is also due at the same time from the Spanish statistical office. The annual HICP inflation rate is seen at 1.1% in February - the same as in January.
Hungary's central statistical office is slated to issue unemployment data at 3:00 am ET. The unemployment rate is seen at 10.6% in January, up from 10.5% in December.
At 3:30 am ET, Statistics Denmark is expected to release GDP results for the fourth quarter. The Danish economy is tipped to contract 0.1% sequentially, after the 0.6% growth in the previous quarter.
In the meantime, retail sales statistics for January are due from Statistics Sweden. Retail sales are forecast to rise by 0.8% on a monthly basis and by 3.9% on a yearly basis.
Trade data for January is also due simultaneously from the statistical office, with the trade surplus seen at SEK 8 billion, up from SEK 5 billion in the prior month.
At 4:30 am ET, the U.K.'s Office for National Statistics is set to issue revised fourth quarter GDP results. Economists expect GDP growth to be revised up to 0.2% from the preliminary 0.1%. On a yearly basis, the economy is seen contracting 3.1%.
Revised inflation data is due from the eurozone statistical agency Eurostat at 5:00 am ET. The year-on-year HICP rate is seen at 1% in January, up from the preliminary estimate of 0.9%.
Elsewhere, the Italian statistical office is scheduled to release producer price inflation data for January. Economists forecast the producer price index to rise 0.4% on a monthly basis but fall 0.4% on a yearly basis.
At 5:30 am ET, Switzerland's KOF institute is set to release the Swiss economy's leading indicator. The index is tipped to rise to 1.80 in February from 1.77 in January.
New Zealand had its best January trade surplus as a percentage of exports in two decades, figures released by the government show. The surplus came about due to a faster rate of decline in imports relative to exports.
Statistics New Zealand said a trade surplus of NZ$269 million was recorded in January or 8.5% of the value of exports, compared to the NZ$32 million deficit in the previous month. Economists were looking for a deficit of NZ$100 million.
This is the first time New Zealand has recorded a trade surplus since May last year and the highest January trade surplus in percentage terms since 1989. Exports were valued at NZ$3.2 billion, down 0.6% from the same month of the previous year, slowing from the 11.1% fall in the preceding month.
Imports, on the other hand, amounted to NZ$2.9 billion in January, down 11.9% from a year ago, after the 17.6% fall in the prior month.
Exports recorded mixed results, with casein & caseinates, cereals, flour, & starch, and meat & edible offal recording large declines. Exports of crude oil & milk powder, butter, and cheese recorded large rises.
Electrical machinery & equipment and mechanical machinery & equipment were the most significant contributors to the decline in imports. Petroleum & product imports recorded the largest increase, led by a rise in crude oil imports.
By country of destination, exports to the U.S. plummeted 48.3% led by lower casein & caseinates exports. Exports to Algeria, South Africa and Japan were also down, while the largest increase in exports was to Australia, up 15.1%.
On the import side, the most significant decrease in imports were from Japan, down 43.4%. Imports from Singapore and Denmark also slumped, while the largest increase in imports during January was from South Korea.
Exports for the three months ended January period amounted to NZ$9.6 billion, down 9.9% from the corresponding period of the prior year. For the same period, imports were worth NZ$9.7 billion or down 17.5%.
Meanwhile, the total number of dwelling starts authorized in New Zealand fell a seasonally adjusted 2.8% month-on-month in January, Statistics New Zealand said. This follows a 3.5% fall in the previous month.
Excluding the "volatile" apartments segment, the seasonally adjusted number of new dwellings authorized rose 0.7%, after falling 3.9% in December.
A total of 1,000 new dwellings and 42 new apartments were authorized in January.
The regions with the largest increases in dwelling consents were Canterbury, Auckland and Northland.
On the other hand, dwelling consents in Marlborough, Tasman, Otago, Wellington, Gisborne, and West Coast decreased.
British consumer confidence improved for the second month in February, the results of a closely watched survey show.
Market research firm GfK NOP said the consumer confidence index stood at -14 in February compared to -17 in the previous month.
Four of the five components of the consumer confidence index experienced an improvement. The sub-index measuring general economic situation over the last 12 months climbed to -50 in February from -57 in the preceding month, while the sub-index measuring general economic situation over the next 12 months rose to 4 from -2.
At the same time, the sub-index assessing the respondents' personal financial situation over the last 12 months nudged up to -13 from -14 while that assessing the financial situation over the next 12 months rose to 6 from 4. The sub-index measuring the climate for major purchases was unchanged at -16.
The annual moving average of the consumer sentiment index also improved and stood at -22, the firm said. A year ago, the sentiment index stood at -35.
The improvement in the consumer confidence indicator, albeit a small one, is welcome news for the government, commented Nick Moon, Managing Director of GfK NOP Social Research.
"It is also significant that, for the second month running, the biggest gains in individual elements of the index, were for the view of the economy in general over the last and next 12 months," he said.
The U.K. economy crawled out of its six-quarter recession in the December quarter, recording a dissapointing 0.1% quarterly expansion, led by growth in the manufacturing and services sectors.
The lacklustre nature of the recovery has sparked concerns that the U.K. economy could operate well below its pre-recession levels for a long time.
Last week, figures showed that U.K. inflation had accelerated to 3.5% and that public finances had deteriorated further. The country's budget deficit is estimated at 11.8% of gross domestic product and is projected to climb further this year to levels similar to that of underfire Greece.
Fears over the strength of the economy resulted in the British pound falling to a nine-month low against the U.S. dollar on Thursday.
Industrial production in Japan was up a seasonally adjusted 2.5 percent on month in January, the Ministry of Economy, Trade and Industry said on Friday, climbing for the 11th consecutive month.
That was sharply higher than analyst expectations for a 1.0 percent increase following the 1.9 percent gain in December.
On an annual basis, industrial production jumped 18.2 percent - again topping forecasts for a 16.5 percent increase after the 5.1 percent gain in the previous month.
Industries that mainly contributed to the increase include transport equipment, chemicals and fabricated metals. Commodities that mainly contributed to the increase include large passenger cars, transmission and control parts and bearings.
Inventories were up 1.0 percent on month in January, the data showed, rising for the first time in two months. They were down 12.6 percent on year.
Shipments climbed 2.4 percent on month and19.3 percent on year, climbing for the 11th consecutive month. The inventory-shipment ratio added 1.0 percent on month, gaining for the first time in three months.
According to the Survey of Production Forecast in Manufacturing, production is expected to ease 0.8 percent on month in February and increase 1.6 percent in March.
Industries that contributed to the decrease in February include electronic parts, information and communication electronics equipment and transport equipment.
Industries that contributed to the increase in March include electronic parts and devices, electrical machinery and transport equipment.
Also on Friday, the METI said that retail sales in Japan climbed 2.6 percent to 11.155 trillion yen in January compared to the previous year, rising for the first time in 17 months.
That was sharply higher than analyst expectations for a 0.2 percent decline following the revised 0.2 percent contraction in December.
Sales from large retailers fell 4.6 percent on year to 1.716 trillion yen, matching both the forecasts and the rate of decline from the previous month.
On a monthly basis, retail sales surged by a seasonally adjusted 2.9 percent versus forecasts for a 0.3 percent increase after the 1.1 percent contraction in December.
Core consumer prices in Japan declined 1.3 percent on year in January, the Ministry of Internal Affairs and Communications said on Friday, declining for the 11th straight month and reinforcing deflationary fears.
The result was exactly in line with analyst expectations, and it matched the previous month's reading. Overall inflation also shed an annual 1.3 percent after falling 1.7 percent on year in December. Overall CPI eased 0.2 percent on month.
Earlier this week, the Bank of Japan in its monetary policy board minutes from last month's meeting noted that deflation was likely to continue for some time. This is due in large part to the measures the bank employed to battle last year's recession, including leaving its uncollateralized overnight call rate unchanged at 0.10 percent.
The central bank has been at odds with the government over how best to handle the threat of deflation, although neither side is publically offering any specific strategies - only general warnings.
"The CPI data show deflation is continuing," Finance Minister Naoto Kan said on Friday at a regular press conference. "We need further effort to get out of it."
Among the individual components, fuel prices were down 5.8 percent on year, while furniture was down 5.5 percent, recreation fell 1.9 percent as did food, clothing shed 1.4 percent and medical care was down 1.1 percent.
The February core inflation reading for Tokyo - considered a leading indicator of the nationwide trend - showed a 1.8 percent annual decline. The overall inflation rate also was down 1.8 percent.
Among the individual components, fuel costs plunged 9.2 percent on year, while furniture prices were down 5.9 percent, clothing prices were down 3.5 percent, recreation was down 2.7 percent and housing was down 0.5 percent.
Overall inflation was flat on month in Tokyo.
The price of crude oil fell Thursday, as bearish data from the US labor market strengthened worries about the economic health of the top oil consumer even as Federal Reserve Chairman Ben Bernanke relieved fears of an immediate rate hike by the central bank.
A firm greenback and rise in crude inventory levels also weighed on oil prices.
Crude oil for delivery in April settled $1.83 lower at $78.17 per barrel in the New York Mercantile Exchange, retreating from an intraday high of $80.32.
Wednesday, the Energy Information Administration in its weekly update had reported a 3.0 million barrel rise in US crude stockpiles in the week ended February 19.
The US Labor Department reported Thursday an unexpected increase of 22,000 in initial jobless claims to a seasonally adjusted 496,000 in the week ended February 20.
Retail sales in the U.K. grew in February after a decline in January, a survey of retailers conducted by the Confederation of British Industry revealed Thursday.
The survey conducted between January 27 and February 10 revealed that 46% of retailers said their sales increased in early February compared to a year ago and 23% said sales decreased. The resulting balance was +23%, clearly up from -8% in January. It also marked the strongest year-on-year increase in sales since May 2007. Moreover, it bettered retailers' expectations that there would be little change in sales volumes.
Further, a balance of 16% of retailers expect that, compared with last March, there will be further growth next month. Retailers revealed that they expect the business situation to be broadly stable over the next three months.
The volume of orders placed on suppliers also improved in line with sales volumes, with a balance of 12% saying those were up on a year ago. A similar rate of growth is expected next month.
"While retailers see some growth ahead, the road to recovery through 2010 is likely to be fragile," said Andy Clarke, Chairman of the CBI Distributive Trades Panel. "Worries about the economy and upcoming pay freezes are likely to ensure that shoppers remain cautious," he added.
Japan is scheduled to release January figures for its consumer price index on Friday, headlining a busy day for Asian economic news. Japan also will provide January numbers for industrial output and retail sales, along with housing starts and construction orders.
Inflation is expected to decline 1.4 percent on year following the 1.7 percent annual contraction in December. Tokyo inflation, considered a leading indicator for the national trend, is tipped to shed 2.0 percent on year after the 2.1 percent annual decline a month earlier.
Industrial production is expected to add 1.0 percent on month and 16.5 percent on year after gaining 1.9 percent on month and 5.1 percent on year in December. Retail sales are tipped to ease 0.2 percent on year and 0.3 percent on month after falling 1.1 percent on month and 0.2 percent on year a month earlier. Housing starts are forecast to fall 11.6 percent on year after the 15.7 percent plunge in December.
Singapore will provide industrial production figures for January. Analysts are expecting output to add 19.3 percent on year but ease a seasonally adjusted 2.1 percent on month following the 14.4 percent annual gain and the 18.1 percent monthly increase.
Thailand will announce January numbers for current account, imports, exports, trade balance and manufacturing production. The current account is expected to show a surplus of $1.003 billion after the $758 million surplus in December. Imports are expected to surge 46.3 percent on year, while exports are seen higher by 29.6 percent. The trade balance is tipped to show a surplus of $736 million following the $122 million deficit in the previous month. Production is expected to climb an annual 36 percent after adding 35.7 percent a month earlier.
Finally, the Malaysian and Indonesian stock markets are closed in observance of the birthday of the Prophet Muhammad. Both bourses will re-open on Monday.
The dollar remained strong versus its beleaguered euro area counterpart on Thursday, but edged lower against the resurgent yen amid growing concerns about the pace of the US economic recovery.
The yen has once again become a favored safe haven play, supported by increasing evidence that the US jobs market remains distressed.
On Capitol Hill this week, Federal Reserve Chairman Ben S. Bernanke reiterated that extraordinarily low interest rates are necessary for an extended period in order to support a gradual economic recovery.
Today's reassurances on low rates came on the heels of data showing another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th.
The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week.
The buck slumped below 89 versus the yen for the first time in three weeks. On a longer term basis, the dollar moved closer to a 15-year low of 84.08.
On the flip side, the dollar gained on the euro, coming within a hair of last week's 9-month high of 1.3444 before hitting resistance. The euro has been beset by slow economic growth and concerns that Greek debt problems will spread.
S&P says that it may downgrade the Greek sovereign debt rating by the end of March.
The eurozone economic sentiment indicator fell to 95.9 in February from 96 in January after ten months of uninterrupted increases, results of a survey conducted by the European Commission showed Thursday.
Meanwhile, German unemployment increased for the second month in February.
Versus the sterling, the buck surged to a new 9-month high of 1.5158.
St. Louis Federal Reserve President James Bullard said Thursday at Texas A&M University that current financial reforms proposed in Congress might not prevent a future economic crisis and might actually hurt the Fed's ability to deal with one.
Largely echoing remarks he made Tuesday in Richmond, Virginia, Bullard said that a strong central bank "with appropriately broad regulatory authority to provide the nation with the best chance of avoiding a future crisis."
Bullard said that the Fed should have direct access to financial information so that it can fully respond to crises in its role as a lender of last resort.
"The Fed will also be at the center of all future crises because of its lender of last resort role, the reform response should be to provide the Fed direct access to detailed information across the entire financial landscape - not less, as is the focus of current policy discussions," he said. "Only a few of the current financial regulatory reform proposals are likely to help prevent future crises."
Commenting on regulatory proposals in Congress, the St. Louis chief said that multi-member financial oversight council would not be effective in future crises because it would not be able to make quick, decisive decisions.
"The Fed would be better at navigating this type of decision-making, which occurs commonly in monetary policy," he said on Tuesday. "The Fed is also more politically independent than such a council could be."
The comments echo similar sentiment expressed by Ben Bernanke during remarks to Congress on Wednesday and Thursday, in which he said that stripping the Fed of regulatory authority would be a "grave mistake."
Bullard went on to add that proposed restrictions on the Fed's ability to lend money to non-banking entities during "unusual and exigent circumstances," will probably exacerbate a future financial crisis because the central bank will have less authority to act.
The euro hit fresh yearly lows against the yen and remained under pressure against the dollar on Thursday amid renewed pessimism about the global recovery. The higher-yielding euro has been in retreat of late, hurt by risk aversion and worries that Greek debt problems will spread to other member states.
S&P says that it may downgrade the Greek sovereign debt rating by the end of March.
The euro slumped to 1.3450 versus the dollar, coming within a hair of last week's 9-month low of 1.3444 before finding support.
Traders considered another round of troubling data on the US jobs situation and a second day of Congressional testimony by Fed Chair Ben Bernanke.
In another disappointing sign for the beleaguered labor market, the Labor Department report showed another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th.
The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week.
On Capitol Hill, Bernanke reiterated that extraordinarily low interest rates are necessary for an extended period in order to support a gradual economic recovery.
The gloomy mood about the global economy helped drive up the value of the safe haven yen. The euro dropped to a yearly low of Y120.
In economic news from across the Atlantic, eurozone economic sentiment indicator fell to 95.9 in February from 96 in January after ten months of uninterrupted increases, results of a survey conducted by the European Commission showed Thursday.
Meanwhile, German unemployment increased for the second month in February.
In another disappointing sign for the beleaguered labor market, the Labor Department released a report Thursday morning showing another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th.
The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week.
With the increase, which marked the second consecutive unexpected jump in claims, jobless claims rose to their highest level since coming at 501,000 in the week ended November 14, 2009.
However, Peter Boockvar, equity strategist for Miller Tabak, noted, "The snow storms were a definite influence on the reported data likely due to the administrative backlogs that got created, thus don't read too much into the data."
"With this said, the trend in initial claims is still too high and while the pace of firings still has slowed dramatically, companies still remain very reluctant to aggressively add workers on a permanent basis," he added.
The Labor Department said that the less volatile four-week moving average edged up to 473,750 from the previous week's revised average of 467,750. In the previous week, the four-week moving average was at its lowest level in over a year.
Continuing claims, a reading on the number of people receiving ongoing unemployment help, rose to 4.617 million in the week ended February 13th from the preceding week's revised level of 4.611 million.
At the same time, the report also showed that those receiving emergency unemployment compensation fell by about 318,000 in the week ended February 6th to 5.48 million. Those receiving extended benefits also edged down by 2,405 in the week ended February 6th to 203,612.
While James Knightley, an economist at ING Financial Markets, noted that the unexpected increase in weekly jobless claims could be weather related, he said, "Either way, it is not encouraging for next Friday's labor report, with a 90,000 decline in payrolls our early estimate."
Next Friday, the Labor Department is due to release its closely watched employment report for the month of February. On average, economists expect the report to show that non-farm payrolls fell by about 20,000, while the unemployment rate is expected to tick back up to 9.8 percent.
Orders for manufactured durable goods showed a much bigger than expected increase in the month of January, according to a report released by the Commerce Department on Thursday, with the growth largely due to a substantial increase in orders for commercial aircraft.
The report showed that durable goods orders increased by 3.0 percent in January following an upwardly revised 1.9 percent increase in December. Economists had expected orders to increase by 1.5 percent compared to the 1.0 percent growth originally reported for the previous month.
However, the bigger than expected increase in durable goods orders was due in large part to a 15.6 percent increase in orders for transportation equipment, which in turn reflected a shocking 126 percent increase in orders for commercial aircraft and parts.
Excluding the increase in orders for transportation equipment, durable goods orders actually fell by 0.6 percent in January compared to an upwardly revised 2.0 percent increase in the previous month. The decrease surprised economists, who had expected 1.0 percent growth.
Commenting on the jump in commercial aircraft bookings, Paul Ashworth, Senior U.S. Economist at Capital Economics, said, "The orders data reported by Boeing (BA) indicated that this spike actually occurred in December, leaving us bemused when the official figures showed aircraft orders falling in the final month of last year."
"For whatever reason, those extra Boeing orders have now turned up in January's official orders data," he added. "Better late than never."
The unexpected decrease in ex-transportation orders in January was partly due to a 9.7 percent drop in orders for machinery, which followed a 7.4 percent increase in December.
On the other hand, orders for computers and electronic products, primary metals, and electrical equipment, appliances, and components showed notable increases.
The report also showed that orders for non-defense capital goods, excluding aircraft, which is seen as a good indicator of business spending, fell by 2.9 percent in January following an upwardly revised 3.3 percent increase in December.
The Commerce Department also said that shipments of durable goods edged down by 0.2 percent in January after rising by 2.4 percent in the previous month.
Inventories of durable goods fell for the thirteenth consecutive month, edging down by less than 0.1 percent in January after falling by 0.2 percent in December.
Fed Chairman Ben Bernanke said Thursday that while the U.S. economy appears to be recovering from its collapse during the 2008 financial crisis, it still has a long way to go, and that the recovery will move slowly through the coming months.
Speaking before the United States Senate Committee on Banking, Housing and Urban Affairs, the Fed chief repeated remarks he made Wednesday before the House Committee on Financial Services, saying that low inflation expectations will keep the target for the federal funds rate at near zero levels.
Bernanke also touched on problems in the labor market, saying that although the market's deterioration seems to be slowing, weaknesses in the job market still remain in light of decreases in job losses and a modest January rise in full-time manufacturing jobs.
"Notwithstanding...positive signs, the job market remains quite weak, with the unemployment rate near 10 percent and job openings scarce," he said in prepared remarks.
"Of particular concern, because of its long-term implications for workers' skills and wages, is the increasing incidence of long-term unemployment; indeed, more than 40 percent of the unemployed have been out of work six months or more, nearly double the share of a year ago."
Concerns about the health of the labor market were fueled this morning by government data showing jobless claims rose last week to 496,000, marking an increase for a second straight week.
He pointed out later in the testimony that the Fed expects the unemployment rate to fall to 6.5-7.5 percent by the end of 2012, well above the "long-term sustainable rate" of five percent.
Speaking on inflation, Bernanke said that slack in the labor markets and a flattening of oil prices will keep inflation subdued for some time.
Bernanke also added that holding mortgage backed securities off the market will hold mortgage rates down, though the Fed does not know the direct effect of stopping the Fed's mortgage backed securities purchases, which are set to run down in March.
The central bank chief also defended the Independence of the Fed saying that stripping it of its regulatory authority would be a mistake.
The central bank chief also spoke on concerns about the country's budget deficits, saying that long-term budget deficits could not, and should not be sustained, saying that ignoring the deficit problem would have wide spread negative effects on the economy.
Elsewhere in his testimony, Bernanke touched on the Fed's announcement last week to raise the discount rate to 0.75 percent, and the decision to shorten the maximum term of discount window loans to overnight for most banks, saying that improved financial conditions are limiting the need for Fed assistance.
"These changes, like the closure of most of the special lending facilities earlier this month, are in response to the improved functioning of financial markets, which has reduced the need for extraordinary assistance from the Federal Reserve," he said.
The Fed chief also talked about new tools to unwind its accommodative monetary policy, including expansion of reverse repurchase agreements and a term deposit facility "that could convert a portion of depository institutions' holdings of reserve balances into deposits that are less liquid and could not be used to meet reserve requirements."
Cleveland Federal Reserve President Sandra Pianalto, a voting member of the central bank's policy making committee, said Thursday that extraordinarily low interest rates are necessary for an extended period in order to support a gradual economic recovery.
"The economy is anything but back to business as usual," said Pianalto, speaking to the Dayton Area Chamber of Commerce.
Her remarks echo those offered Wednesday by Fed Chairman Ben Bernanke in his semi-annual testimony to Congress.
With no threat of inflation on the horizon, Pianalto suggested the Fed has room to keep interest rates near zero to ensure an economic recovery that may "end up being one of the longest in our history."
Pianalto also stressed that the economy must not leave small businesses behind, noting that the economy cannot fully recover without a healthy small business sector.
Pianalto said that the strongest expansion in employment after each of the past two economic recessions came from small firms - many with less than 20 employees - which contributed to a rebuilding of the economy.
"Collectively, these statistics tell us that small business is in fact big business, and its impact is even greater because it remains one of the most innovative and flexible parts of the economy," she said in prepared remarks.
The Cleveland chief went on to stay that small businesses were hit especially hard during the 2008 financial crisis, particularly because of their exposure to the problems that hit the real-estate market during the crisis.
This is because of the direct nature of their business, such as construction, or because their buildings figure more prominently in their share of business assets, or because their personal property is often used to secure lines of credit," Pianalto said. "And don't forget that most community banks, which generally lend to small businesses, are actually small businesses themselves.
She added that that such conditions are making access to credit "especially challenging" for small businesses.
Speaking on ways to help small businesses recover and contribute to the re-growing of the U.S. economy, Pianalto said that the Fed is working with other regulatory agencies to issue new guidance to banks on small businesses and commercial real-estate lending, and encouraging banks to work closer with their customers during times of economic stress.
Pianalto added that lawmakers have proposed increasing caps on Small Business Administration loans to allow more lending to small businesses.
"So while there is no cure-all solution, there is widespread awareness at the policy level that helping to find solutions to the challenges facing small business is vitally important to our recovery," she said.
Pianalto's remarks come a day after Fed Chairman Ben Bernanke addressed the U.S. House Financial Services committee, saying that the economy would continue to recover slowly through the coming months.
Speaking on the economic outlook, Pianalto said that the recovery from the recession may be the longest recovery in the history of the United States
"While we are likely now in a period of recovery, it doesn't really feel much like one," she said.
Pianalto said that weak levels of demand are leading to excess capacity, which is leading to low sales at many business, which, in turn, leads to downsizing and a higher unemployment rate.
The Cleveland chief said that unemployment will remain a big concern during the fledgling recovery, adding that without a pickup in hiring, it will be harder for consumers to spend, and with consumers reluctant to spend, "hiring will remain subdued."
"All types of businesses are continuing to see weak levels of demand . . ." she said. "This in turn creates excess capacity, which leaves businesses having to decide whether to maintain or shut idle plants and offices. In such an environment, firms are being cautious about new hiring and so unemployment persists at a high level, which in turn restrains spending."
The Eurozone and EU27 economies may fail to find growth momentum in most of 2010 as temporary stimulus measures are phased out gradually and deterioration in the region's labor market continues, latest set of forecasts from the European Commission showed Thursday.
In its interim forecast, the commission, which is the executive arm of the European Union, said the economy of 16 nations would expand 0.2% in the first, second and third quarters of this year on a sequential basis. Growth is anticipated to nudge up to 0.3% in the final quarter.
In the fourth quarter of 2009, the Eurozone economy expanded 0.1%. For the whole of 2010, the commission forecasts 0.7% growth, unchanged from autumn forecast released in November 2009. It follows 4% contraction in 2009. The commission's quarterly and whole year outlook for EU27 are similar to that of euro area.
"With the main driving forces being still temporary in the EU and globally, the robustness of the recovery is yet to be tested, and a soft patch later this year is accordingly to be expected in the EU as well as in most developed economies," the Brussels based-commission said in a statement.
It noted that recent data for both the euro area and EU27 send mixed signals about the pace of the recovery. While a better-than-expected external environment could spur exports further, investment remains very weak and the labor market continues to deteriorate.
The commission maintained its forecasts for the major three Eurozone economies compared to autumn forecast. The German and French economies are expected to grow 1.2% in 2010 and Italy is anticipated to expand 0.7%.
Growth outlook for the Netherlands was revised up to 0.9% from 0.3% predicted earlier. Meanwhile, the prospects for Spain improved. The commission now sees 0.6% contraction in the Spanish economy in 2010, better than a 0.8% fall forecast in November.
Further, the commission maintained its 2010 inflation outlook for Eurozone at 1.1%, while revised up the forecast for EU27 to 1.4% from 1.3%. Compared to 2009, inflation is expected to accelerate in Germany, France, Italy and Spain, while ease in the Netherlands.
Regarding the region's labor market, the commission said survey indicators suggest that the deterioration in the situation could level off in the course of 2010. There were no significant changes in the labor market outlook compared to autumn forecast.
Turning to public finances, available information suggests that, in line with the broadly unchanged outlook for economic activity, the 2010 budgetary position in the EU and the euro area should be broadly as expected in the autumn forecast, the commission said. In the autumn forecast, the commission had forecast euro area government deficit to rise to around 7% of GDP in 2010 and to 7.5% in the EU27.
Out of the currency bloc, the commission lowered its outlook for the U.K. economy. It now forecasts 0.6% growth in 2010, down from 0.9% expansion predicted in the autumn forecast. Inflation outlook for this year was revised up to 2.4% from 1.4%. Inflation stood at 2.2% in 2009.
After ten months of uninterrupted increases, the Eurozone economic sentiment eased slightly in February as consumers and retailers showed more pessimism, survey data released by the European Commission showed Thursday.
The economic sentiment indicator edged down to 95.9 in February from 96 in January. That was in contrast to economists' expectations for a reading of 96.4.
A measure for consumer confidence dropped to minus 17 from the previous month's minus 16. The decline reflected in the retailers' sentiment index, which fell to minus 9 from minus 5.
Industrial confidence indicator climbed to minus 13 from minus 14 and the sentiment indicator for the services sector rose to a positive reading of 1 from minus 1. Meanwhile, the confidence indicator for the construction sector stood unchanged at minus 29.
February's economic, consumer and business survey adds to the recent run of worrying evidence on the euro-zone's prospects, said Jennifer McKeown, senior European economist at Capital Economics. "It was the first decline in nearly a year and worse than the consensus forecast of a modest increase," the economist noted.
BNP Paribas economist Clemente De Lucia sees further fall in economic sentiment over the coming months. "The transitory forces, such as fiscal stimuli and the end of the destocking process, which boosted activity particularly in the third quarter of 2009, are indeed fading," De Lucia said in a note.
The economic confidence index for EU stood at 97.4 in February, up from 97.2 in January. Similar to Eurozone, consumer and retailers' confidence fell in February, while industrial confidence remained unchanged. Services sector sentiment indicator stabilized and a measure for construction sector confidence improved.
Among the largest member states, France reported the biggest decline in economic sentiment, followed by Italy. In contrast, Poland reported the most significant increase, while improvements were less pronounced in Spain, Germany and in the Netherlands. Sentiment was broadly unchanged in the U.K.
In a separate report, the European Commission said the business climate indicator for the euro area rose for the eleventh month in a row. It stood at minus 0.98 in February, up from minus 1.13. Nevertheless, the relatively low level of the indicator suggests that year-on-year growth in industrial production in January 2010 was still negative, the Commission said.
The latest confidence figures are a reminder that it is premature to talk about a self-sustaining, jobs-creating recovery, ING Bank economist Martin van Vliet said. "It is too early to tell whether this is a temporary pause or marks the end of the confidence recovery, the economist noted.
Moreover, today's figures highlight the need for the European Central Bank to tread carefully in unwinding unconventional stimulus, and to keep interest rates firmly on for the time being, the ING Bank economist said. The central bank, which maintained its key interest rate unchanged at 1% since June last year, is widely expected to retain the interest rate for a tenth consecutive month on March 4.
Also on Thursday, the Commission maintained its 2010 economic growth outlook for Eurozone at 0.7%. It said the region's economic growth would be muted for most of 2010 and may gain some momentum only towards the end of the year.
Wednesday, the Statistics South Africa announced that the consumer price index or CPI rose 6.2% year-on-year in January, slower than the 6.3% growth in the preceding month. Economists were looking for an increase of 6.4%. A year earlier, the CPI was up 8.1%.
Food and non-alcoholic beverages prices decreased 2.4% on an annual basis in January, while recreation and culture index fell 8.1%. Transport charges were up 6.2%.
On a monthly basis, the CPI increased 0.3% in January, same as in the previous month.
India's food inflation, as measured by the wholesale price index, or WPI, for the week ended February 13 dropped due to the lower prices of tea, pulses, fruits and vegetables.
Primary articles
The WPI for the week ended February 13 for this group, with a weightage of 22.02%, fell by 0.45% from the preceding week. The rate of inflation was 0.21% in the preceding week and minus 0.12% in the corresponding week in the preceding year.
Annual rate of inflation for the week ended February 13 for this category rose by 15.84% due the higher prices of pulses, potatoes, vegetables, wheat, as also milk. The rate of inflation was 16.23% in the preceding week and 6.23% in the corresponding week in the preceding year. The 52-week average inflation for the week under review was 9.38%, data show.
Among the sub-groups, index for the 'Food Articles' category declined by 0.45% due to the lower prices of tea, masur, gram, fruits and vegetables, arhar, moong, barley. However, the prices of bajra and urad moved up.
On annual basis, the Food Articles inflation stood at 17.58%, compared to 9.49% for the same week in the preceding year and 17.97% in the previous week. The 52-week average inflation for the week under review was 13.30%
The index for the 'Non-Food Articles' group dropped by 0.51% due to the lower prices of logs and timber, soyabean, rapeseed, mustard seed, as also fodder, whereas those of coil fibre, mesta, raw silk, gingelly seed, castor seed and copra moved up.
On annual basis, the Non-Food Articles inflation stood at 12.78%, compared to 2.30% for the same week in the preceding year and 13.15% in the previous week. The 52-week average inflation for the week under review was 2.12%
Fuel, Power, Light & Lubricants
The index for this major group, with a weightage of 14.23%, for the week under review was unchanged at its previous week's level of 355.5.
The annual rate of inflation for this category was also unchanged at its previous week's level of 9.89%. It was minus 3.98% for the corresponding week in the preceding year, The 52-week average inflation for the week ended February 13 was minus 4.34%.
Opposition parties disrupted proceedings in the Indian Parliament on Tuesday accusing the United Progressive Alliance government of failing to control a surge in prices.
The Economic Survey 2009-10 calls for increase in food production and productivity to the forefront of national strategy.
Wednesday, the Statistics Norway announced that the jobless rate stood at 3.3% in December, measured by the average of three months from November to January period, faster than the 3.2% in September, measured by the average of three months from August to October. Economists' expected the jobless rate to be 3.3%.
The jobless rate for November, measured by the average of three months from October to December period was 3.3%, revised from 3.2% reported initially.
The International Monetary Fund (IMF) has approved a $3.6 billion loan to Iraq that it desperately needs to run the government and rebuild the war-ravaged country, after a 15-month program supported by a so-called "Stand-By Arrangement" expired on March 18, last year.
The IMF executive board approved the new two-year loan under the same arrangement. The IMF-supported program is designed to support Iraq's economic growth over the next 24 months through February 23, 2012 and reduce the budget deficit to 19 per cent of GDP in 2010 and 6.0 per cent in 2011, besides posting a budget surplus in 2012.
About $455 million were immediately made available to the Iraqi authorities, IMF said Wednesday.
The successor arrangement will cover the country's balance of payments needs after the economy took a beating from falling oil prices last year, the Washington-based institution said.
Plummeting oil prices last year left Iraq, heavily dependent on oil exports for more than 95% of state revenues, with a public deficit of 20 per cent of economic output, Ron van Rooden, IMF mission chief in Iraq, said in a conference call with reporters.
The new loan comes ahead of Iraq's crucial parliamentary elections on March 7 and as US troops start pulling out of the country later this year.