Spending stumbles in October as income growth stalls

1:30 PM growth, income, October, spending, stalls, stumbles No Comments

Reuters

US consumer spending fell in October for the first time in five months as income growth stalled, what slowdown of economic growth in the fourth quarter.

The U.S. Commerce Department said Friday consumer spending fell 0.2 percent after an unrevised 0.8 percent increase in September.

It said it could not quantify the implications of Superstorm sandy, but added that where the source data was not made, adjustments still available or the effects of the storm not reflected.

Although the storm that slammed late October for the East Coast, was automobile sales brake, the decrease in expenditure last month partially a reflection of the weak economic fundamentals.

By Reuters surveyed economists had expected, would be the consumer spending, which accounts for 70 percent of the U.S. economy, flat last month.

Adjusted for inflation, fell 0.3 percent, the first decline since June, after rising 0.4 percent of the previous month consumer spending.

It was also the largest decline since September 2009 and implied increase in consumer spending this quarter would fight 1.4 percent in the third quarter annual rate, exceeding was the slowest in more than a year.

While the economy in the third quarter after 1.3 percent in the previous three months to advance came from much of the boost the recovery of the Dunmore and robust Government spending, grew 2.7 percent. That is lost in the last three months of the year.

Growth also on the terms of the storm could be pressure and automatic deep spending cuts on Government and increased taxes, the $600 billion could release early next year, when the Congress and the Obama administration on a cut less-severe budget deficits some.

Income was in October for the first time since April unchanged and followed a gain of 0.4 percent in September. The Department said, private wages and salaries fell through caused work stoppages reflecting Sandy.

The amount of the income of private households after inflation and taxes dipped 0.1 percent after his apartment in September available. Despite weak income growth, the saving rate rose to 3.4 percent from 3.3 percent of the previous month.

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Economic growth still modest, Fed report finds

6:00 AM economic, finds, growth, modest, Report, still No Comments

Reuters

The U.S. economy trucked along at a "measured" pace in recent weeks and hiring remained modest, according to a Federal Reserve report that did little to calm concerns about slow growth and high unemployment.


Details from the manufacturing sector were mixed, the Fed said in its Beige Book report on Wednesday. Contacts in five of the Fed's 12 districts reported worries about the outlook for 2013, predicated in part on concerns about a looming "fiscal cliff" contraction in the U.S. government's budget.

"Consumer spending grew at a moderate pace in most districts," the report said, alluding to a generally upbeat outlook for holiday sales from those contacts that offered their views on the key shopping season for retailers.

The report, which compiles anecdotal evidence on the economy based on the Fed's business contacts, also found few signs of price pressures.

That should give comfort to Fed policymakers, who recently launched a large new stimulus plan aimed at supporting the economic recovery and keeping long-term interest rates low.

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Ensure growth which increases productivity for the setting

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By NBC News staff and wire reports
Companies displaced more work from staff in the spring than first thought, what this setting could remain means later in the year in the doldrums.

The Labor Department reported Wednesday non-agricultural business productivity rose at an annual rate of 2.2 percent in the second quarter from a first estimate of 1.6 percent. Productivity slipped in the first quarter to 0.5 percent pace.

Rising productivity can increase corporate profits. It can slow down even jobs if it means that companies become more and more of its current employees and need to add any employees.

Yet there how much companies from their staff can squeeze limits. If this happens, productivity slows down, companies must typically rent to keep more workers with the demand.

One of the reasons productivity is improved in the second quarter slowed the setting, only 75,000 jobs a month from April to June. This is down from an average 226.000 per month in the first quarter.

U.S. employers added 163,000 jobs in July, the best month in five months to hire. The unemployment rate slightly up to 8.3 percent. Setting probably speed up from this level will not except again attracts growth or productivity slows down, economists say.

The Government will publish August employment report on Friday. Economists forecast that 135,000 jobs the economy last month added to, and the unemployment rate of 8.3 percent remained.

The Federal Reserve closely follows changes in productivity and labor costs to ensure that inflationary pressures are not always out of control.

Last year, the productivity has increased 1.2 percent. This is far below the average productivity growth of 3 per cent in 2009 and 2010 resulted. These gains were a result of massive redundancies slashed costs in the face of falling demand during the recession as companies.

Economists said typical productivity during and after a recession. Companies tend to shed workers in the face of falling demand and to increase output from a smaller workforce. When the economy starts to grow, demand should increase and finally, companies add workers, if they want to keep.

Reuters and associated press contributed to this report.

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Economy's growth rate revised upward, a bit

1:30 PM Economys, growth, revised, upward No Comments

By NBC News staff and wire reports
The economy's pace was more like a turtle than a snail in the second quarter.

The Commerce Department reported Wednesday that it had revised slightly upward its initial estimate for second quarter gross domestic product to a rate of 1.7 percent from 1.5 percent. The first quarter's pace remained at 2.0 percent.

The government report attributed the increase to exports and personal spending which offset sluggish state and local government spending and slow restocking of inventories by businesses wary of the economic environment at home and overseas.

The report also showed that after-tax corporate profits unexpectedly rose at 1.1 percent rate after sinking 8.6 percent in the first quarter.

While the composition of economic activity was fairly favorable, growth remains well below the 2-2.5 percent rate required every quarter to hold the unemployment rate steady, which could compel policymakers at the Federal Reserve to offer additional stimulus at their September 12-13 meeting.

Speculation the Fed would loosen policy further had been dampened by a pick-up in job growth and a rebound in retail sales in July, but other data on business spending and inflation supported more action.

Chairman Ben Bernanke could offer more clarity in the near-term outlook for monetary policy when he gives a speech at the Kansas City Fed's high-profile gathering in Jackson Hole, Wyo., at the end of the week.

The jobless rate rose to 8.3 percent in July from 8.2 percent the prior month. The weak economy could be a stumbling block to President Barack Obama's quest for a second-term in office in November.

First-quarter economic growth was revised up to show strong export growth, despite slowing global demand. Trade contributed 0.32 percentage point to GDP growth instead of subtracting a third of a percentage point, as previously reported.

That helped to offset the drag from inventories. Business inventories increased $49.9 billion instead of $66.3 billion and subtracted 0.23 percentage point from GDP growth in the April-June period. However, the careful management of stocks can be a boost to the economy in the third quarter.

Excluding inventories, GDP rose at a 2.0 percent rate rather than 1.2 percent. In the first quarter, final sales of goods and services produced in the United States increased at a 2.4 percent pace.

There were also upward revisions to growth in consumer spending, which was bumped up to a 1.7 percent pace from the previously reported 1.5 percent. That was a step-down from the 2.4 percent pace recorded in the first quarter.

Investment in the construction of nonresidential structures was stronger than previously reported. But growth in business investment in equipment and software was lowered to a 4.7 percent pace, the slowest since the third quarter of 2009, from 7.2 percent previously.

Spending by businesses on equipment and software has slowed sharply from a peak of 18.3 percent in the third quarter of last year.

That appears to have intensified early this quarter, with a measure of business spending plans falling sharply in July. The pullback likely reflects worries of deep government spending cuts and higher taxes scheduled to kick in at the start of 2013, as well as troubles from the debt crisis in Europe.

Growth in spending on homebuilding was cut to an 8.9 percent rate from 9.7 percent. The decline in government spending was not as deep as previously reported, with defense outlays falling at a 0.1 percent rate instead of 0.4 percent.

Though consumer spending was revised up, inflation pressures remained muted.

A price index for personal spending rose at an unrevised 0.7 percent, the slowest pace since the second quarter of 2010. It rose 2.5 percent in the first quarter.

A core measure that strips out food and energy costs advanced at an unrevised 1.8 percent pace, slowing down from 2.2 percent in the prior quarter.

Reuters contributed to this report.

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Growth rate of the U.S. economy slowed in the second quarter

10:30 AM economy, growth, quarter, second, slowed No Comments

By NBC News staff and wire reports
The US economy grew up to the slowest pace in nearly a year between April and June as consumers and businesses concerned about jobs, wages, Washington and Europe died from a raft.

The Commerce Department reported that gross domestic product expanded pace from January in the second quarter, after rising to a 2.0 percent revised upwards to March at an annual rate of 1.5 percent. Output for the fourth quarter increased by 3.0 per cent to 4.1 per cent.

The growth rate in the second quarter, the expectations of economists was, was the slowest since the third quarter of 2011. It solves a major hurdle for President Barack Obama like him for reelection in November against the Republican challenger Mitt Romney battles. With only a few months until the election left voters already form strong opinions about the economy, may be hard to shake that before they get in the voting booth.

"The economy fights to keep level", said Robert dye, Chief Economist at Comerica in Dallas.

Consumers spent at the lowest speed in a year when they again reduced, purchase helped car, economic growth in the previous two quarters.

Shoppers are spending in an economy, which is not yet fully by the financial crisis and the recession late 2007 to mid-2009 with the nation, unemployment rate of 8.2% has recovered. This reluctance reflected in each of the last three months in the retail sales, closed. Also wages stagnate since years undermines the willingness of consumers to spend.

The economy needs a growth rate of at least 2.0 to 2.5, which prices stable, let % only to employment than whittling down to keep it.

The weak growth report, characterised by weak data of employment to manufacturing, can expectations in a third round of bond purchases, known as quantitative easing by the Fed raise.

The Fed has injected already $2.30 trillion into the economy through asset purchases and overnight interest rates close to zero, leaving some economists worry to make that the Fed left not enough applications, has his Kit.

No major political announcement is expected at the Fed next week, but many economists now say two-day meeting could move the Central Bank if policy makers on September 12-13.

Last month the Fed extended a program to the bonds re-weight, which already holds it in the direction of the longer dated borrowing costs.

The economy was by ensure deep Government spending cuts and tax increases, the expected early 2013 kick in hit, as well as problems of the debt crisis in Europe.

The biggest factor that is at rest with a weight of fear that politicians in Washington not in the position, is to avoid the so-called tax cliffs at the turn of the year, said economists.

Current economic data suggest to limited area for growth in the third quarter again on its feet.

Wall Street and Washington Watch consumer spending closely because it accounts for more than two-thirds of the U.S. economy. Structures.

Reuters contributed to this report.

CNBC Rick Santelli breaks the latest economic data on the gross domestic product of the country, with Joel Naroff, President of Naroff Economic Advisors.

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Fed has slowed down some options such as world economic growth

1:30 PM economic, growth, options, slowed, world No Comments

For the first time in decades, the fed as a toothless tiger is looking for.

It is clear that is several wheels of the world economy in the unison brakes, pressure on the world's largest Central Bank spur growth Assembly. But with the cost of borrowing already at historic lows, it is far from clear whether further measures, which are cheaper to help on money.

"they have a hammer and they are looking for a nail," said Alan de Rose, Managing Director of the Government trade and finance at Oppenheimer, Reuters.

The Fed Committee meets policy setting next week amid reports that it may be in the close of fresh Act, to stimulate the weakening economy.

Companies concerned about the inclusion of new risk and households ends with struggling to meet new data you show this week on an ongoing slowdown in the United States

The Commerce Department estimate of second-quarter gross domestic product, due Friday, is expected that slowed down to show growth in the first three months of the year from 1.9 percent to 1.2 percent. The slowdown follows a series of monthly reports on a weakening labour market and show a stubbornly high unemployment rate.

Still, the impact of a deepening of the recession in Europe feel American companies. Surveys of Europe's private sector this week, showed that the contraction that began in weaker economies of the eurozone has now spread to Germany and France. In the 17 countries that use the euro, the production has fueled issue. Consumers are gloomy as it 2009 already.

As the European meltdown on the entire U.S. economy weighs, States are dependent on vulnerable heavily on exports, by the deepening crisis overseas.

If the reduced global credit markets in the fall of 2008, central banks around the world quickly exhausted they reliably have used the primary tool, for decades fight financial fires: slashing interest rates given for money directly to banks. Despite these efforts, the world economy into a nasty recession slipped.

Since the Fed has a number of new tools, including the purchase of some $2 trillion in bonds to lower prices on other forms of credit, see you mortgage deals. For a time those movements seemed to revive growth: gross domestic product and setting picked last year, and the housing market seemed stabilized have.

Despite a flurry of press reports of possible new moves, that is not expected fed to make fresh announcements before their next meeting two days policy next week. Even most of the measures under consideration have been tried already.

Buy more bonds could help, support to the financial markets, but would do little to spur lending. With interest rates at or near record low extending the promise, the extremely low prices on 2014 out by itself provided probably not for the promotion of businesses and consumers to take on more risk.

So, with the world economy slows, the Fed deeper in his Toolbox reached.

With borrowers on the sidelines are considering measures to try fed policy, the bankers make more money in the system slide prod. Such a move would be to reward banks that borrowed more loans, an idea to make a recent program launched by the Bank of England. Bernanke indicated to reporters in June that the Fed was considering the plan.

Another measure to the urge to move bankers make more money from their depots and again in the economy would mean cutting the interest rate the Fed pays financial institutions Park which keeps their money at the Central Bank, is that now lies at 0.25 per cent.

But no matter how many new, that they are trying moves, Fed Chairman Ben Bernanke has acknowledged that the impact of these measures will be limited. When he last week legislators faces of the Central Bank warned that major obstacles, their task of strong growth and stable prices that are beyond their control.

"Rest in the United States continue to by a number of other headwinds, including the still tight credit conditions for some businesses and households, and the restraining effects of fiscal policy and fiscal uncertainty, be withheld", Bernanke told a Senate Panel.

Translation: Businesses and consumers are still have a hard time for loan. And unless Congress and the White House, head of the emerging $600 billion "fiscal cliff" increased massive taxes and spending cuts, there is little the Central Bank can do to avert a further recession.

The Fed is not alone in its predicament.

Seems to be now locked in a coordinated slowdown with the world central banks around the world have been the system with money to businesses and consumers to borrow and spend prod floods.

But still, that the world economy will lose momentum. The downturn is most evident in Europe, where a deepening debt crisis weigh on business and consumer confidence and hammering of the banking system.

Like the American fight European Central bankers to push money into the economy. But deep Government spending cuts in Greece and Spain many households without content spend leave have. And in the middle of a debt-induced are a financial storm, companies and consumers across the continent to lend no desire. A closely watched European Central Bank survey showed Wednesday, that the demand for loans remains weak in the euro area.

In China show slowed rapidly, the forward movement of the last big economy. Although still is booming compared to the developed economies, try Chinese officials to control their emerging economies on a course, maintains the robust growth but avoid a ruinous run up prices.

After the adoption of measures last year to a new bubble to cool, Beijing moves now to resume growth. But these measures are likely to be too limited to help to revive the rest of the world economy.

Reuters contributed to this report.

Discussion about the State of U.S. markets and whether further Fed action is necessary, with CNBC Contributor Joe Lavorgna and Ron Insana and CNBC by Steve Liesman.

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UPS sees slower growth; stock falls

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Shares of United Parcel Service sank 4 percent to just below $75 Tuesday after the world’s largest package-delivery company reported a drop in international package sales, which pulled quarterly earnings below analysts’ estimates.

Seen as a bellwether for the U.S. economy because it ships all sorts of products, UPS cut its full-year earnings forecast, citing a weakening global economy for the remainder of the year. The Atlanta- based company also reported second-quarter earnings that fell short of Wall Street expectations.

“Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion,” Scott Davis, chairman and CEO of UPS, said in a statement.

“Throughout its history, UPS has maintained its strength in all economic cycles and we are making the adjustments necessary to respond to today’s challenging conditions,” Davis added.

Donald Broughton, a transportation analyst at Avondale Partners, says UPS is suffering from the economic difficulties now plaguing Europe, where UPS derives 14 percent of its revenue. Package volume is down 3 percent in the region, and pricing is down over 5 percent, he said.

“You just can’t face those kinds of headwinds when that’s 14 percent of your revenue and still bring the bottom line number home,” he told CNBC.

The recent UPS deal to acquire European package carrier TNT Express will double the company’s exposure to Europe, Broughton said, and it could prove to be a thorn in the company’s side.

“So they’re doubling down on a bet on an economy that’s decelerating,” he said. “That doesn’t bode well for the stock in the near and the intermediate term.”

Broughton said he prefers shares of shipper FedEx, which has greater exposure to Asia and is trading at “a severe discount to UPS.”

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US economic growth slows in the first quarter

12:30 PM economic, first, growth, quarter, slows No Comments

Chris Keane / Reuters

Helping out the economy. Government data showed the U.S. economy slowed in the first quarter, but consumer spending helped soften the blow.

By msnbc.com staff and news wires
The U.S. economy grew at a slower pace in the first quarter of 2012, increasing concerns about the health of the recovery. The blow was softened by a rise in consumer spending, however.

The Commerce Department, in its initial reading of how the economy fared as the new year began, reported Friday that gross domestic product expanded at an annual rate of 2.2 percent in the first three months of the year. That's down from a 3.0 percent rate in the fourth quarter and below economists' expectations of a 2.5 percent pace.

A surge in consumer spending took some of the sting from the report. Growth was still stronger than analysts' predictions early in the quarter for an expansion below 1.5 percent.

"Certainly a bit of a mixed picture, a disappointment on the headline coming in at 2.2 versus expectations of 2.5. Personal consumption was positive. But overall weaker-than-expected GDP," said Camilla Sutton, chief currency strategist at Scotia Capital.

Although the details were mixed, the GDP report offered a somewhat better picture of growth compared with the fourth quarter, when inventory building accounted for nearly two thirds of the economy's growth. In the first quarter, demand from consumers took up the slack.

Consumer spending which accounts for about 70 percent of U.S. economic activity, increased at a 2.9 percent rate - the fastest pace since the fourth quarter of 2010. That compared to a 2.1 percent rise in the fourth quarter.

There were some signs of underlying strength, with even home construction rising at its fastest pace since the second quarter of 2010, thanks to the unusually warm winter.

But business spending fell for the first time since the fourth quarter of 2009, with investment in equipment and software rising at its slowest pace since the recession ended.

Business spending fell at a 2.1 percent pace after rising 5.2 percent in the fourth quarter.

The report will probably not change views on monetary policy. Federal Reserve Chairman Ben Bernanke on Wednesday expressed comfort with the current stance of Fed policy, but held out the prospect of more bond buying if the economy deteriorated.

Americans stepped up spending on automobiles in the first quarter, with motor vehicle sales rising by the most in four years. Part of that reflected pent-up demand after last year's earthquake and tsunami in Japan disrupted supplies and left showrooms bereft of popular models.

And encouraged by a spurt in job growth, some households may have replaced older vehicles after tightening their belts during the 2007-09 recession. Motor vehicle output contributed 1.12 percentage points to first-quarter GDP growth.

But with the labor market showing early signs of fatigue after employment growth averaged 246,000 per month between December and February, consumer spending could soften in the second quarter.

Some gauges of regional factory activity eased as the second quarter started, and consumer confidence ebbed. In addition, first-time applications for unemployment benefits have spiked in recent weeks, although many economists pin the rise on seasonal quirks.

While the unseasonably warm weather helped the economy by boosting home building and renovations, it undercut demand for utilities, spending at ski resorts and sales of winter apparel.

As a result, weather was probably not the biggest contributor to growth during the quarter.

Inventories also helped GDP growth, just not as much as in the fourth quarter. Inventories increased $69.5 billion after rising $52.2 billion in the fourth quarter.

The change in inventories contributed just over half a percentage point to GDP growth compared to 1.81 percentage points in the fourth quarter.

Excluding inventories, GDP is rose at a 1.6 percent rate. In the fourth quarter, the comparable figure was just 1.1 percent.

Elsewhere, growth in the first quarter was held back by a another drop in government defense spending, which confounded expectations for a strong rebound. An increase in exports was offset by a rise imports, causing trade to have virtually no impact on growth.

Are you feeling optimistic, or not, about the economy. Let us know on Facebook.

Reuters contributed to this report.

CNBC's Rick Santelli and Steve Liesman break down the first quarter's GDP results and discuss its impact on the markets and what it indicates about the health of the U.S. economic recovery.

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The services sector accelerated growth a little

1:31 PM accelerated, growth, little, sector, services No Comments

NEW YORK-the pace of growth in the dominant U.S. accelerated a bit in December, an industry report showed Thursday, suggesting continuous improvement in the economy.

For supply management said, to Institute that its services sector index 52.6% last month from 52,0 in November rose. The reading shy of forecasts of economists for 53,0, sank after Reuters poll, but was above the 50 mark, which indicates expansion.

The report strengthens the case for the "modest upturn in the US economy", said Omer Esiner, lead analyst at Commonwealth Forex in Washington.

Setting in the service sector accounts for more than two-thirds of the US economy, improved in December, called the Esiner "encouraging."

But when 49,4, he noted that the employment component still below the 50 line between expansion and contraction.

A separate report Thursday showed that businesses in December, the highest monthly gain in a year of 325,000 new staff recruited. A comprehensive report of the Government by Friday to show that a more modest 150,000 public and private sector jobs last month have been added.

"Certainly we get some encouraging news on the labour market, but we have very aware that there is a very volatile time of annual-reflects the holiday season and the days after the new year", said Bernard Baumohl, global Chief Economist at the Economic Outlook Group in Princeton, New Jersey, United States.

The U.S. service sector has obviously a little better than will keep the euro zone. An upswing in the German activity helped composite PMI withdraw the Markit euro area, although the survey showed last month weaker economies such as Spain and Italy further behind Germany and France to 48.3 of 47,0.

Markets expect that the euro zone into recession will fall this year, when countries reduce battle to the high budget deficits.

Economists expect that in the fourth quarter US growth, the 1.8 percent have overtaken rate between July and September, but most expect the economy to expand a gradual pace of about 2 percent in the year 2012.

Copyright 2012 Thomson Reuters.

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Data show growth in the sector factory construction

10:46 PM construction, factory, growth, sector No Comments

The Institute for supply management (ISM) said on Tuesday that the index of national factory activity for December is a reading of 53, 9-showed the best level since June.

A reading above 50 shows growth in this sector.

Separately, rose construction spending U.S. to one near 1-1/2 year in November high such as investments in public and private projects solid, solvent cementing increased expectations of strong economic growth in the fourth quarter.

Construction investments 1.2 percent to an annual rate of $807.1 billion, its highest level since June 2010, increases said the Commerce Department on Tuesday.

Spending in October was 0.2 per cent declined, looked at after initially reported as an increase to 0.8 per cent.

Economists of from Reuters respondents had construction investment expected to rise 0.5% in November.

Overall, the construction investment was up 0.5 percent compared to November 2010.

Private construction spending rose by 1.0%, promotion for a fourth month. 2.0 Per cent, with solid gains in multi-family and single family homes increased spending on residential projects.

The housing market shows some signs of recovery, with generators more ways in new projects for the growing demand for rented accommodation. It is less and less of a drag on the economy and is expected to significantly add to the growth in the year 2012.

Private nonresidential building was flat in November after falling 0.6 percent of the previous month.

Spending on public construction had 1.7 per cent in November as 5.3 percent federal expenditure jumped when dropped from 7.5 per cent in October.

State and local government spending for a 1.2 per cent in the previous month increased 1.3 percent.

The associated press and Reuters contributed to this report.

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French economic growth Sputters stop

9:44 PM economic, French, growth, Sputters No Comments

PARIS - France economic engine ground to a halt in the spring, as French consumers cut their spending and exports dried up, is to strengthen the concerns that the global economy faced increasing recessionary threats.

The worse than expected French personalities come, like policy makers encrypt, investor nerves to settle down, that the country of's next major economy, could lose the coveted AAA rating.

A movement Friday from stock market regulators in France and elsewhere in Europe, a form of speculation to ban, some are blamed for turbulent trading in recent days saw some effects to have that economists stressed that a very fragile recovery.

French bank shares were flat or slightly lower in early trading in Paris. In the last few days have been like Societe Generale and BNP Paribas extremely volatile amid rumors about their financial health.

The EU markets supervisor, the ESMA the short selling ban announced late Thursday night to increase monitoring of the stormy markets earlier in the day. A trader wants to make a profit in a short sale by you bet on the decline in the price of a stock. The practice is been blamed for contributing to market volatility.

Regulators in France, Italy, Spain and Belgium are the prohibitions, whose Angaben vary from country to country every implementation.

The French market regulator, the AMF said that net-short-selling bans BNP Paribas and Credit Agricole and leading insurer for 15 days on 11 shares, including the banks Societe Generale,.

Authority of Belgium announced a ban on short selling in financial stocks such as leading banks and insurance companies from Friday. Belgium had already banned short selling, which is essentially a bet on a decline in the price of a share without borrowing of share since August 2008.

Several countries banned short selling during the financial crisis 2008 to try to tame the volatility. But some experts the prohibitions, actually a feeling of uncertainty contributed to.

Message, that French economic growth sputtered in the second quarter to rest concerns that the European economy by the debt crisis is dependent on that struck some countries and has fueled the turmoil in the markets is likely.

The French economy posted zero growth in the second quarter, national statistical office said INSEE. Government had forecast growth of around 0.2 percent in the period economists.

Growth in the first quarter was nearly 1 percent, but a sudden reversal of consumer spending and stagnation of the country exporters the seizure has caused to the euro-zone's second-largest economy.

Finance Minister France Friday morning took the airwaves again in an attempt to put a positive spin numbers on the weak second quarter.

"It's no surprise that is worse than the first in the second quarter, which we expected," Francois Baroin said in an interview on French radio station RTL. He said, the Government with the glue deficit reduction targets in spite of lower is.

This week said the French Central Bank that the economy will grow only 0.2 percent in the third quarter. The Bank monthly industry survey showed corporate books and factory utilization rates fall for the second consecutive month in July.

Copyright 2011 of the associated press. All rights reserved. This material cannot be published, sent, rewritten or redistributed.

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Breakneck growth in China slows down slightly

1:21 PM breakneck, China, growth, slightly, slows No Comments

BEIJING - China's economy grew at the slowest pace since 2009, but always still managed, faster than expected to expand in the second quarter. The growth eased fears of a hard landing and strengthened Beijing's determination to fight persistently high inflation.

China's Statistics Bureau said on Wednesday that the prices to stabilize the top priority remained, although a "complex and volatile" global economic growth, complications of the political decisions threat.

Gross domestic product in the second quarter grew by 9.5 percent over the previous year by more than the forecasts of economists for 9.4 per cent growth, supported by solid domestic consumption and investment.

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But that was still was the slowest pace since the third quarter of 2009, when the world economy from the worst recession in 80 years.

Some cooling erwarteten-and even willkommen--, because China raised interest rates and clamped down on bank lending to try the inflation to facilitate, a three-year high in June has taken. The stronger than expected numbers indicate GDP there that Beijing can have more room for dragging without slowing down the growth.

"These are very good numbers,", said Liu Li gang, an economist with ANZ in Hong Kong.

"This is perhaps the reason why the (Central Bank) last week increased interest rates." "They show that they fear no significant slowdown in the economy."

For investors worried that Beijing's pulling campaign too heavy a toll on the fastest growing major economy in the world could the figures offered some reassurance. Industrial production in June was also stronger than expected is growing at its fastest pace in more than a year.

Asian shares and metals all rose Australian dollars.

China's GDP in the April to June rose 2.2 percent compared to the first quarter on a seasonally adjusted basis, a slight revival in pace of 2.1 percent in the first quarter.

Chinese officials noticed hawks note in the last days, bearing in mind the risk that inflation could fan unrest overheating.

Although many economists, that overall inflation pressures easier in the second half of the year believe prices are increased for popular staples such as pork and it takes time for them to go back.

The Central Bank and the forecast expected a narrow majority of analysts to raise interest rates again this year increasing Bank reserve ratios, a Reuters poll last week.

Sheng Laiyun, spokesman for China's Statistics Bureau, said inflation stabilization was the main objective, and politics would be "targeted, flexible and effective," in reference to the recent comments by Prime Minister Jiabao Wen.

"It is not easy and fast to maintain economic growth, when the overall situation is complex and volatile China has done a great job," Sheng said.

Europe's sovereign debt troubles and a decline in the US economy means that two of the best export customers in China have to contend. In June, orders slipped export a manufacturing survey showed already in July, the questions about China's growth prospects raised.

But Wednesday figures suggested that domestic demand remains robust. Final consumption growth have 4.6 percentage points to the first half, while easily exports subtracts, Bureau said China's statistics.

Analysts say China's economy is a rate would be with the the equivalent of adding the Switzerland GDP for the 6-trillion dollar economy to grow well above 9 percent this year.

Still say weak demand growth to slacken can cause in China's Western export markets in the third quarter from the second, they.

Rebalancing
Industrial production rose 15.1 percent in June a year earlier, the strongest growth since May 2010. It also marked a sharp hope by May 13.3 percent and beat market expectations of 13.1 percent.

The growth figures underlined the resilience of the world's second largest economy, thanks to the rapid urbanisation of the country, and could soothe investor concerns about a sharp slowdown in the global demand for commodities delle would.

An economist with IFR, a unit of Thomson Reuters said "The data should also help to which wild fears about an economic collapse in China to dispel", George Worthington.

Capital investment grew 25.6 per cent in the first six months a year earlier, while 16.8 percent expanded the retail sales, show that domestic demand still relatively well despite tightening policy stopped.

"The economic growth data are very optimistic and industrial production is clearly stronger than expected," said Xu Biao, an economist with China Merchants Bank in Shenzhen. "It's all about the expectations as Chinese imports and (purchasing managers survey) were quite weak in June."

Increased demand at home helps to isolate not only China from the global turmoil, but offers a bit of a buffer for the rest of the world and evidence that good makes Beijing promise from export-oriented growth. But it can increase also price pressure.

However, inflation of Beijing remains top priority policies should avoid that economic growth, said large swings Premier Wen in comments released on Tuesday.

In June, he signals that the country would fight in the year 2011 to meet its average inflation target 4 percent. Monthly consumer price numbers show public inflation 5.4 per cent in the first half of the year.

Academic consultant of the people's Bank of China was quoted by State television on Wednesday that the rate of inflation may have reached in June, when it hit 6.4 percent.

Li Daokui, Member of the Central Bank of monetary policy Committee, said that the full-year inflation rate could be around 4.8 per cent.

Last Wednesday, China increased rates by 25 basis points-the third such as this year-increase the deposit took the a year discount rate by 3.5 percent.

The Central Bank has raised benchmark interest rates five times since October and banks required reserve ratio-its bisher-preferred political tool - nine times removed.

Reuters contributed to this report.

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China raises prices, shrugs off growth slowing

5:32 PM China, growth, prices, raises, shrugs, slowing No Comments

Kevin Yao and Aileen Wang

Beijing (Reuters) - China interest rates for the third time raised this year on Wednesday, to clarify that inflation remains tame top priority, even as growth step of its huge economy facilitates gently.

The increase in the credit and deposit rates 25 basis points underlined China's quiet confidence, which is resistant enough to endure to more restrictive monetary policy of the world's second largest economy and is not vulnerable to the hard landing, that some investors fear.

China beat analysts close to, or even at the end of a cycle of rate increases and which was the latest move a preventive strike, before an another big jump in inflation data next week depositors provide to low income increased.

"Today's rate increase suggests that China's June remains inflation higher than might be expected and the second quarter GDP, solid, with our expectations", said Ligang Liu, head of greater China economics at ANZ in Hong Kong.

"The PBOC will help the interest-rate hike to optimize, their monetary policy by alleviate negative real interest rate problem to an outflow of deposits from the banking system to prevent the deterioration."

The latest move raised China's benchmark 6.56 percent and its one-year deposit reference rate by 3.5 percent a year lending rate, said the Central Bank.

The increases take effect Thursday, the Central Bank said in a brief statement on its website.

Response to concerns that this latest monetary tightening an already sluggish world economy will choke sold after the announcement, risk-weighted assets, particularly those with direct links to China's growth as the Aussie dollar.

China watchers could not agree whether is it more rate rises in the second half of the year. The people's Bank of China (PBOC) has banks reserve requirements nine times in this rate rises triggered in his nine-month cycle of the tightening of monetary conditions.

"China's inflation is almost to the end of battle." "There are already indications that the pressures that come", said Frederic Neumann, an economist at HSBC in Hong Kong. "Today's rate increase therefore the last in the cycle may have been"

GROWTH AND INFLATION

Hopes that close to a pause in the tightening of the PBOC may be considered a positive for stocks and could keep the rise in the Yuan onshore swap rates. Such expectations have helped, the Shanghai composite index bounce from nine month lows hit in June.

The world's second-largest economy expanded by more than 10 percent last year but has cooled down in 2011. First quarter growth was 9.7 per cent and data next week are expected, to the tempo eased to display 9.4 percent in the second quarter.

Evidence is growing that China's large manufacturing sector to lose momentum at home by both stricter policies and weakening of demand from abroad.

A survey of purchasing managers showed expanded the factory sector at its weakest pace in 28 months in June, mainly due to a drop in new orders. Many analysts estimate that the pace is a business, the extension on average to about 9 percent and industrial growth of around 13 percent.

In addition, a double-digit increase in wages should be included in already strong domestic demand.

With U.S. interest rates close to zero, Beijing is to ensure that it could attract more hedge funds in China, if that is too far prices. That would aggravate inflation the problem of excess liquidity and more fuel.

Just as there are insert fight with a negative real rate of return on their cash in banks to appease.

China's inflation accelerated a 34-month high of 5.5 percent in may as higher food prices and red-hot real estate market price pressure kept alive.

A Reuters poll forecast data due on July 15 will show that inflation rose to 6.3 percent in June-its highest level since mid-2008. Many economists estimate that inflation will reach its peak June or July.

Beijing is particularly sensitive to rising prices, the may be stirring the currency Union and threaten its leadership.

Wang Jun, an economist at CCIEE, a Government think tank, said that Beijing is again rate raise inflation, more stubborn than expected forced feel.

"When inflation comes down, there is no need to raise rates." But when prices rebound, could it further price increases, "he said."

(Writing by Koh GUI Qing and Vidya Ranganathan;) (Editing by Ruth Pitchford and Neil Fullick)

Copyright 2011 Thomson Reuters.

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