Economy - Friday
Investor's Business Daily
On Friday July 17, 2009, 7:16 pm EDT
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U.S. growth gauge at 5-year high
A measure of leading U.S. economic activity fell a point 15 118.1 last week, the Economic Cycle Research Institute said. But its 4-week annualized growth rate rose to 7%, the best since '04, from 6.2% a week earlier. Another stimulus is unnecessary as the "the bulk of the gov't spending is still in front of us," said Lakshman Achuthan, ECRI's managing director. He said the recession's days are numbered and he expects a smooth recovery.
The U.S. averted a "financial catastrophe," but sustainable recovery hinges on redirecting the economy away from consumption, said White House economic adviser Lawrence Summers. Critics assail Obama's policy plans as overly costly and ambitious, but Summers said the reforms were essential to repair the economy. Euro zone trade surplus shrinks
The 16-nation bloc's trade surplus narrowed to $2.7 bil in May from $3.8 bil the month before, according to Eurostat. The euro zone posted a trade deficit of $5.4 bil in the same month a year ago. Exports fell 24% vs. a year earlier to $138.1 bil; imports dropped 27% to $135.4 bil, the lowest since 2005.
Britain's economy will take time to recover, but growth may resume by year-end, Bank of England Deputy Gov. Charles Bean said. China's reserves are diversified
The Chinese central bank said the nation's $2 tril stockpile of foreign exchange reserves, the world's largest, is diversified despite the $800 bil in U.S. Treasuries. Analysts say 70% of China's FX reserves, which are a state secret, are invested in dollar-dominated assets such as U.S. debt. Central bank chief Zhou Xiaochuan's satisfaction with its dollar-heavy investment portfolio differs with calls he made earlier this year for a new super-sovereign currency to end the greenback's dominance.
A Japanese economic panel warned of a deflationary spiral, the biggest risk to the world's No. 2 economy, and advised the gov't and the Bank of Japan to work closely to stop prices from falling further. Russia's jobless rate fell to a 6-month low of 8.3% in June vs. 8.5% in May, the gov't said. COMING UP MONDAY
Leading indicators for June, 10 a.m. EDT (forecast: 0.5%).
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