The Macro Sweep

August 30, 2013 9:27 pm

Brazil and India growth, eurozone unemployment

Brazil carried the emerging markets flag on Friday, overshooting expectations with a quarterly growth rate of 1.5 per cent, while India disappointed with a slowdown to 4.4 per cent growth – its worst performance since 2009. Out of Europe, overall levels of unemployment were stable and consumer and business confidence increased, while higher exports helped to drive up the Polish and Danish economies.

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South Africa: Imports of machinery and chemical products widened the trade gap to $1.4bn in July, up from $0.75bn in June. Imports rose by 18 per cent in July to $8.78bn on the back of a 19 per cent increase in imported machinery and appliances, and a 34 per cent hike in imports of chemical products.

Those import levels far outpaced the 11 per cent climb of exports to $7.39bn. Within exports, precious and semi-precious stones and metals increased by 22 per cent.

Americas

Brazil: The economy grew by 1.5 per cent quarter on quarter, the highest rate since early 2010, and overshooting predictions. The annualised rate of growth is 6 per cent, according to the national statistics agency, and expanded 3.3 per cent from the same period last year.

US: Personal income increased by 0.1 per cent, or $14.1bn, while disposable personal income increased by 0.2 per cent, or $21.7bn, in July compared with June. Personal consumption expenditures increased by $16.3bn.

Real disposable income increased by 0.1 per cent in July compared with a 0.2 per cent decrease in June.

Real personal consumption expenditure adjusted to remove price changes increased less than 0.1 per cent in July, compared with an increase of 0.2 per cent in June. Purchases of durable goods increased 0.1 per cent, and by 0.5 per cent for non-durable goods. Purchases of services decreased by 0.1 per cent compared with an increase of 0.1 per cent the month before.

The PCE price index increased 0.1 per cent in July compared with a 0.4 per cent increase in June.

Canada: Economic growth slowed to 0.4 per cent in the second quarter compared with 0.5 per cent growth in the first, though it grew at an annualised rate of 1.7 per cent. Growth was dragged down by slow business investment and a decline in energy exports that was not completely offset by a boost in consumer spending.

Domestic demand rose by 0.6 per cent, and household final consumption grew by 0.9 per cent in the second quarter. Government final consumption expenditure rose by 0.6 pre cent.

However, business gross capital formation fell by 0.1 per cent, while investment in non-residential structures, machinery and equipment was 0.6 per cent lower.

Exports increased by 0.2 per cent, less than their 1.3 per cent increase in the first quarter, and were outpaced by imports that grew by 0.4 per cent compared with 0.6 per cent in the first quarter.

Chile: The jobless rate sank to 5.7 per cent in the May-to-July period, compared with 6.5 per cent a year ago. The reduction in unemployment is explained by the improvement in job creation which was up 55.7 per cent on the year, while the labour force was unchanged at 59.1 per cent.

Asia

India: GDP growth disappointed with an expansion of just 4.4 per cent compared with the same time last year, down from 4.8 per cent in the first quarter – the economy’s worst performance since 2009.

Thailand: The central bank gave its economic report for July, saying the economy continued to “moderate”. Private consumption slowed, contracting by 0.7 per cent on the year due to a decline in car and other durable purchases, the central bank reported. Households also bought fewer big-ticket items “given their previous debt accumulation”, though purchases of non-durable goods continued to increase.

Merchandise exports were down by 1.3 per cent on the year, which contributed to a 4.5 per cent drop of the manufacturing production index. Headline inflation moderated to 2 per cent on the year.

“The account was in deficit due mainly to gold imports and significant repatriation of profits and dividends,” the bank said.

Japan: Inflation climbed while the jobless rate shrank slightly and housing starts continued to increase for the 11th straight month. Consumer prices excluding fresh food rose 0.7 per cent compared with last year in July, over the estimate of a 0.6 per cent gain.

The jobless rate fell to 3.8 per cent from 3.9 per cent in June, as the number of unemployed people dropped by 330,000 from the previous year to 2.55mn.

Housing starts rose 12 per cent in July compared with a year earlier to 84,459 units as consumer confidence increased.

Starts on owner-occupied houses rose by 11.1 per cent, while starts on rental houses increased by 19.4 per cent. Starts on homes for sale by developers rose 4.3 per cent, and by 0.6 per cent for condominiums.

Europe

EU: A flash estimate from the Eurostat put euro area inflation at 1.3 per cent in August, down from 1.6 per cent in July.

Both the euro area and the EU28 saw increases in unemployment compared with last year, but remained stable on the month. Seasonally adjusted unemployment remained stable at 12.1 per cent in July, Eurostat reported, as well as in the EU28 at 11 per cent.

The lowest unemployment rates were recorded in Austria, at 4.8 per cent, and Germany, at 5.3 per cent. The highest rates were in Greece, at 27.6 per cent in May, and Spain, at 26.3 per cent. Unemployment increased in 17 of the eurozone members and fell in 11, with the highest increases in Cyprus and Greece.

The Business Climate Indicator from the European Commission for the euro area rose for the fourth successive month in August by 0.31 points to minus 0.21, as assessment of past production, level of overall order books and production expectations improved significantly. The future view of export order levels and stocks of finished products was also more positive.

Confidence also improved among consumers, continuing its upward trend with a plus 1.8 improvement due to better views of the general future economic situation, as well as better opinions on the future financial situation of households and savings over the next 12 months. Unemployment expectations were stagnant.

Poland: Second quarter GDP growth was 0.8 per cent on the year, and 0.4 per cent quarter on quarter. The leading engine behind the growth was provided by exports as demand thawed out, said the state statistics office. Imports declined slightly. Final consumption expenditure was 1 per cent higher on the year, driven by a small increase in individual consumption of 0.2 per cent and a jump of 3.9 per cent in public consumption expenditure.

Denmark: Economic growth overshot forecasts in the second quarter, with GDP up by 0.5 per cent compared with the first three months of the year, and by 0.4 per cent on the year. In the first quarter, GDP shrank by 0.2 per cent. Private consumption was stable while investment grew 0.9 per cent compared with the second quarter last year, and exports rose 1.8 per cent, faster than imports, which increased by 0.1 per cent.

Norway: Retail sales fell in July rather than the forecast increase. Retail sales volumes, excluding motor vehicles, decreased a seasonally adjusted 1.3 per cent on the month in July, following a 0.2 per cent decrease from May to June.

“Most industries experienced a decline in sales volume from June to July this year,” the state statistics agency said. Sales were lower in electrical household appliances, furniture, clothing and shoes, with retail chains seeing the greatest decline.

Retail sales of food, beverages and tobacco, and overall in grocery stores, increased in sales volume.

Greece: Retail sales fell at a faster pace in June compared with May as household consumption fell, according to the state statistics agency. Volumes of retail sales fell by 7.8 per cent on the year, after a 2.3 per cent drop in May.

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