Posts Tagged economy
Stocks fall as worries mount over Japanese economy
Posted by Oksana Grebenjuk in Fund Markets on Март 17th, 2011
Mounting concerns over the impact of the massive earthquake in Japan pushed stocks lower Monday. The earthquake and tsunami along Japan’s northeast coast killed thousands and has raised fears of a slowdown in the world’s third-largest economy.
All 10 company groups that make up the Standard and Poor’s 500 index fell. Utilities companies lost 1.5 percent, the most of any group, on worries that the disaster may lead to dimming prospects for nuclear power plants.
The S&P index, the basis for most U.S. mutual funds, fell 12 points, or 0.9 percent, to 1,292.
The Dow Jones industrial average fell 89, or 0.7 percent, to 11,958. The Nasdaq composite fell 18, or 0.7 percent, to 2,697.
«Everything is linked now,» said David Katz, senior portfolio strategist at Weiser Capital Management. «There is no such thing as a catastrophe happening in any major country and it not affecting the global economy.» Read the rest of this entry »
Rising Oil Prices Pose New Threat to U.S. Economy
Posted by Oksana Grebenjuk in Favourites, Trading Markets on Март 1st, 2011
The American economy just can’t catch a break. Last year, as things started looking up, the European debt crisis flustered the fragile recovery. Now, under similar economic circumstances, comes the turmoil in the Middle East.
Energy prices have surged in recent days, as a result of the political violence in Libya that has disrupted oil production there. Prices are also climbing because of fears the unrest may continue to spread to other oil-producing countries.
If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.
Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.
“We’ve gone beyond responding to the sort of brutal Technicolor of the crisis in Libya,” said Daniel H. Yergin, the oil historian and chairman of IHS Cambridge Energy Research Associates. “There’s also a strong element of fear of what’s next, and what’s next after next.” Read the rest of this entry »
U.S. Economy Quickens on Gains in Spending, Exports
Posted by Oksana Grebenjuk in Trading Markets on Февраль 9th, 2011
The U.S. economy accelerated in the fourth quarter of 2010 as consumer spending climbed by the most in more than four years.
Gross domestic product grew at a 3.2 percent annual rate, Commerce Department figures showed today in Washington, falling short of the 3.5 percent median forecast of 85 economists surveyed by Bloomberg News because of a slowdown in inventories. Excluding stockpiles, the economy rose at a 7.1 percent pace, the most since 1984.
“The consumer really drove the economy in the fourth quarter,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who accurately forecast the rate of growth. “The economy has moved beyond recovery to a stable state of growth.”
The dollar advanced on expectations the revival in demand will extend into this year, boosting sales at companies including General Electric Co. and Apple Inc. At the same time, the report showed the Federal Reserve’s preferred measure of inflation climbed at the slowest pace on record, bolstering forecasts the central bank won’t raise borrowing costs until 2012.
Stocks dropped on growing concern over the unrest in Egypt and as shares of Ford Motor Co. and Amazon.com Inc. retreated. The Standard & Poor’s 500 Index fell 1.8 percent to 1,276.34 at the 4 p.m. close in New York. The dollar advanced against the euro for the first time in nine days, strengthening to $1.3611 per euro from 1.3734 late yesterday. Read the rest of this entry »
Tax cuts raise expectations for economy in 2011
Posted by Oksana Grebenjuk in Trading Markets on Декабрь 23rd, 2010
Expectations for economic growth next year are turning more optimistic now that Americans will have a little more cash in their pockets. A cut in workers’ Social Security taxes and rising consumer spending have led economists to predict a strong start for 2011.
Still, most people won’t feel much better until employers ramp up hiring and people buy more homes. Analysts are predicting economic growth next year will come in next year close to 4 percent. It would mark an improvement from the 2.8 percent growth expected for this year and would be the strongest showing since 2000.
«Looking ahead, circumstances are ripe for the economy to develop additional traction,» said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York. He is estimating growth for 2011 to be above 3.5 percent.
The economy grew at a moderate pace last summer, reflecting stronger spending by businesses to replenish stockpiles, the Commerce Department reported Wednesday. Gross domestic product increased at a 2.6 percent annual rate in the July-September quarter. That’s up from the 2.5 percent pace estimated a month ago. While businesses spent more to build inventories, consumers spent a bit less.
Many analysts predict the economy strengthened in the October-December quarter. They think the economy is growing at a 3.5 percent pace or better mainly because consumers are spending more freely again. Read the rest of this entry »
Ghana 2011 budget uses tax hikes to fund spending
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 30th, 2010
Ghana predicted economic growth would double to 12.3 percent in 2011 as its first oil arrived and announced a series of tax hikes aimed at financing heavy new infrastructure spending.
Unveiling next year’s budget to parliament, Finance Minister Kwabena Duffuor pledged to narrow the fiscal deficit from 9.7 percent this year to 7.5 percent in 2011, and foresaw inflation falling steadily through to 2012, when Ghana goes to the polls.
Urging Ghana to avoid the fate of other nations that saw oil finds undermine other sectors in their economies, Duffuor warned that hydrocarbon revenues would not be enough in themselves to transform a country still marked by widespread poverty.
«We must continue to focus our attention on the non-oil sector of the economy, particularly agriculture, small, medium and micro enterprises, mining and manufacturing sectors, which, hitherto, have been the backbone of the economy,» he said of cocoa’s traditional cocoa, gold and other industries.
Duffuor forecast 2011 growth at 12.3 percent compared to 5.9 percent this year. Annual inflation, which has fallen sharply over the year to stand at 9.38 percent in October, would fall to 8.5 percent by December 2011 and 7.0 percent in 2012, he said.
«The new budget is sensible and realistic,» said Lisa Lewin at London-based Business Monitor International. Read the rest of this entry »
Leading economic indicators index rises in October
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 26th, 2010
The Conference Board reported that its index leading economic indicators (LEI) for the U.S. increased by 0.5 percent in October to 111.3, following an 0.5 percent increase in September, and a 0.1 percent increase in August.
“The LEI remains on an upward trend, suggesting the modest economic expansion will continue in the near term. The LEI’s growth has been slowing this year, but gains in the financial components helped its pickup in October,” said Ataman Ozyildirim, an economist at The Conference Board.
Ken Goldstein, also an economist at The Conference Board, noted “the economy is slow, but latest data on the U.S. LEI suggest that change may be around the corner. Expect modest holiday sales, driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring.”
The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.1 percent in October to 101.5, following no change in September, and no change in August. The Conference Board Lagging Economic Index (LAG) increased 0.1 percent in October to 108.7, following a 0.5 percent increase in September, and a 0.1 percent increase in August. Read the rest of this entry »
Why The Stimulus May Not Have Stimulated
Posted by Oksana Grebenjuk in Trading Markets on Ноябрь 5th, 2010
Arnold Kling points to an interesting study by economists John Taylor and John Cogan. It’s an analysis of the effect of the stimulus from a different and intriguing perspective. They write:
Because the ARRA grants to state and local government are fungible and not synchronized with purchases, determining the effect of ARRA on state and local government purchases is more difficult and uncertain than determining the effect on federal government purchases. We therefore analyze the state and local purchases data in detail.
We also consider counterfactuals, trace where the money went, and estimate time-series regressions of the relationship between ARRA grants and state and local government purchases. Our main finding is that the increase in government purchases due to the ARRA has been remarkably small, especially when compared to the large size of the overall ARRA package. In fact, the effect of ARRA on purchases appears to be so small that the size of the government purchases multiplier does not matter much compared to many other factors affecting the growth of GDP.
Taylor and Cogan contend that state and local governments simply substituted federal money for money they would have appropriated via cash flow or borrowing. Effectively, they conclude that little new money actually found its way to the economy.
Kling offers three views of their hypothesis: Read the rest of this entry »
The U.S. economy makes the worst recession
Posted by Oksana Grebenjuk in Trading Markets on Апрель 29th, 2009
The U.S. economy plunged again in the first quarter, making this the worst recession in at least half a century.
Gross domestic product dropped at a 6.1 percent annual pace, weaker than forecast, after contracting at a 6.3 percent rate in the last three months of 2008, the Commerce Department said today in Washington. The report, which reflected a record slump in inventories and further declines in housing, came hours before Federal Reserve officials said the economy continued to contract at a “somewhat slower” pace.
Smaller stockpiles may set the stage for a return to growth in the second half of the year amid signs Fed efforts to reduce borrowing costs and unclog lending are starting to pay off. The contraction persisted even as lower gasoline prices and larger tax refunds helped bring an end to the worst slump in consumer spending in almost three decades.
“We are likely to emerge from this recession very slowly and the recovery will be very weak,” said Richard Berner, chief U.S. economist at Morgan Stanley in New York. “The aggressive policy response we have gotten will take time to work, but it will counter the still-strong headwinds holding the economy back.” Read the rest of this entry »
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