Thursday, August 12, 2010

Summary of the Economics Headlines;US jobless claims ; Euro area industrial production; US import prices


· US jobless claims - Initial jobless claims for the week ending August 7 increased 2,000 to 484,000 from an upwardly revised 482,000 the prior week. This is the highest level for initial claims since the week ending February 20. This data provides evidence that the high level of claims from the week ending July 31 may not have been an anomaly. The rise in claims brought the 4-week moving average for initial claims up 14,000 to 474,000.  

· US import prices increased 0.2% in July and are now up 4.9%oya. The headline reading was boosted by a 2.0% increase in petroleum prices. This contrasts the prior two months in which declining petroleum prices pulled down the headline import price index. Excluding fuels, however, import prices looked soft. 

· Euro area industrial production ex construction fell 0.1%m/m in June (J.P.Morgan: -0.2%, consensus: +0.6%) after an upward revised gain of 1.1% in May (previously reported at 0.9%). In 2Q as a whole, IP in the Euro area is up around 10% ar, a rate of increase similar to the previous quarter and pointing to strong industrial output growth at mid year.  

· Real GDP contracted by 5.8%ar in Greece in the second quarter, a slightly more moderate contraction than what we had assumed as part of our estimate of a 3%ar gain in GDP for the region as a whole (due to be published tomorrow). The official government/IMF/EC adjustment program assumes a GDP decline this year of 4% in real terms. Given the data already published for the first half of the year, a second half contraction which averaged 6%ar would deliver a 4% decline for the year as a whole. The risks around this trajectory are probably skewed to the downside. 

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