The U.S. economy grew more slowly in the first quarter than previously estimated, reflecting smaller gains in inventories and bigger government cutbacks.
Gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate, revised Commerce Department figures showed today in Washington. The report also showed corporate profits rose at the slowest pace in more than three years and smaller wage gains at the end of 2011.
The number of Americans applying for unemployment insurance payments rose last week to a one-month high, a sign that progress in reducing joblessness may be stalling.
First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped.
– ADP pegged May’s jobs growth at 133,000, below the consensus view of 150,000. These are private sector jobs (BLS includes both public and private), and ADP’s reports have a notorious history of being way off from what the BLS reports. But, usually, when they’re off, they’re off to the high side. Last month, they came in weak, and were pretty close. You can’t draw too strong a parallel. Still, this is not a good number.
– Challenger Grey said planned jobs cuts in May rose 53% to about 62,000, the highest level since September. Overall job-cut announcements this year are up 20% from 2011.
Several top retailers reported stronger-than-expected sales in May, as shoppers overcame growing anxiety about the U.S. economy and the job market.
Victoria’s Secret parent Limited Brands Inc said on Thursday that sales at stores open at least a year had risen 6 percent in the four weeks ended May 26. The report came the day after department store chain Macy’s Inc posted a 4.2 percent increase. Both companies beat Wall Street forecasts, according to Thomson Reuters I/B/E/S.
Meanwhile, Costco Wholesale Corp’s May same-store sales rose 4 percent, hurt by the strong dollar’s impact on overseas sales. Analysts were expecting a 4.3 percent increase.
Brazil’s central bank has cut its benchmark lending rate to a historic low as part of efforts to revive growth in Latin America’s largest economy.
The central bank reduced its Selic interest rate by 50 basis points to 8.5 per cent, undercutting the previous mark of 8.75 per cent reached during the 2009 financial crisis.
India’s economic growth fell to a nine-year low in the first three months of 2012, a clear sign that the country’s slowdown is deepening and affecting all sectors of the economy.
Sharp falls in the manufacturing and agriculture sectors led Asia’s third-largest economy to grow only 5.3 per cent year on year in the quarter, compared with 9.2 per cent growth a year earlier.
This is the worst performance of India’s economy since 2003 and far worse than the situation in the wake of the global financial crisis and the collapse of Lehman Brothers in late 2008, adding pressure on policy makers to take emergency actions to revive the country’s growth.
European Central Bank President Mario Draghi called on European politicians to come up with a vision for the euro zone for the years ahead to better tackle the region’s debt crisis and to restore confidence, suggesting that a centralization of financial-sector regulation should be the first step.
“The sooner the vision is clarified the better for the European Union,” Mr. Draghi said Thursday at a hearing in front of the European Parliament’s Committee of Monetary and Financial Affairs.
Hong Kong retail sales in Apr rose much less than expected and Japan’s IP was light. In the Euro zone, CPI rose 2.4% y/o/y, the slowest since Feb ’11. In Germany, the number of unemployed remained flat but the rate fell to 6.7%, a reunification low. Retail sales in Germany and France in April were above estimates.