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WORLD> America
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US consumptions rise, inventories drop
(Agencies)
Updated: 2009-09-12 10:13 NEW YORKL: Improving US consumer sentiment and a big drawdown in wholesale inventories on Friday built on recent evidence that an economic recovery was picking up speed.
Evidence of a durable recovery is coming in from all quarters with economic data, company earnings and big drivers of global growth like China all signaling strength ahead. Concerns about a frail jobs market continue to temper optimism about the US recovery, however. "We are in a recovery, but it is a weak recovery because the consumer is still very strained on the income side," said Kurt Karl, head of economic research at Swiss Re in New York. Chicago Federal Reserve president Charles Evans on Friday said the US was "tentatively" emerging from a severe recession. The Reuters/University of Michigan Surveys of Consumers said the preliminary reading of its consumer confidence index for September rose to 70.2, the highest since June, from 65.7 in August. This was above economists' median expectation of a reading of 67.3, according to a Reuters poll.
Inventories at US wholesalers in July fell to their lowest level in nearly three years, declining for the 11th straight month after sharp drops in furniture and metals stocks, government data showed, suggesting consumer demand was reviving. The Commerce Department said total wholesale inventories dropped 1.4 percent to $387.2 billion, the lowest level since September 2006, after a revised 2.1 percent decline in June. Economists had expected a 1.0 percent drop in July from June. The data helped to give Wall Street stocks a brief boost. US Treasuries shrugged off the data to trade higher. US import prices jumped 2.0 percent in August as the cost of oil rose, the US Labor Department said. The increase, twice what analysts had expected, was the fifth rise in the last six months. It followed a July drop of 0.7 percent. Excluding petroleum, import prices increased a much milder 0.4 percent in August after falling 0.3 percent in July. In China, industrial output for August and other economic data reported earlier on Friday were a positive surprise suggesting the economy is on a solid course but not so strong that Beijing will need to hit the policy brakes any time soon. The only weak spot in the Chinese data was trade. Exports fell 23.4 percent from a year earlier, a sharper drop than expected and accelerating from July's 23 percent fall as global demand remained frail. Despite some economic optimism, the head of the International Monetary Fund, Dominique Strauss-Kahn said governments around the world should not put a stop to supportive economic policies given the economic crisis had not yet come to an end. In an interview set to appear in Saturday's edition of French daily Le Monde, Strauss-Kahn also said that reforms related to financial regulation were progressing too slowly. |
