Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Surprise drop in US GDP

While you were sleeping: Surprise drop in US GDP

Jan 31 (BusinessDesk) – Wall Street slid after a report showed a surprise contraction in the US economy in the final quarter of 2012.

Gross domestic product fell at a 0.1 percent annual rate in the fourth quarter, after growing at a 3.1 percent pace in the third quarter, according to Commerce Department data. Polls of economists by both Bloomberg News and Reuters had predicted a 1.1 percent increase.

It was the weakest showing since the second quarter of 2009. Still, the underlying data were positive, economists said.

“I’m not going to say growth is particularly strong, but this is not a recessionary signal by any means,” Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, Massachusetts, told Bloomberg News.

Edelstein's team projected a 0.3 percent gain, the lowest in the Bloomberg survey. “This really was a story about a payback in national defense spending. Consumer-spending growth picked up, fixed investment was fairly strong.”

Jim Russell, chief equity strategist for US Bank Wealth Management in Cincinnati, agreed. "Inventories came down and that subtraction is actually positive for the private sector," Russell told Reuters. "A lot of the important components going forth are there, like consumption by individuals and capital spending, and they are looking strong."

Alan Krueger, chairman of the White House Council of Economic Advisers, said the data indicate that spending cuts – as sought by Republicans in exchange for raising the US debt ceiling – would hurt the economic recovery.

"Today's report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy," Krueger said in in a blog post today, according to Reuters.

Indeed, today's jobs data beat expectations. Private payrolls climbed 192,000 in January following a gain of 185,000 in December, according to ADP National Employment data.

All eyes are on January's jobs report, due Friday. The US added 155,000 jobs this month, a report from the Labor Department is forecast to show.

Companies including Amazon.com and Boeing provided earnings that beat expectations.

Shares of Amazon.com climbed 5.4 percent after reporting margins that pleased investors.

Shares of Boeing, recently battered by worldwide safety concerns about its newest commercial airliner, the 787, rose 1.2 percent.

In afternoon trading in New York, the Dow Jones Industrial Average slipped 0.10 percent, while the Standard & Poor's 500 Index fell 0.11 percent. The Nasdaq Composite Index was steady at 3,156.79.

Investors are eyeing the statement that will follow the end of a two-day meeting of US Federal Reserve policy makers later today.

The Fed will probably renew its commitment to continue buying assets into next year, according to a Bloomberg News survey of 44 economists.

In Europe, the Stoxx 600 Index finished the session with a 0.6 percent drop from the previous close. Stocks in London, Frankfurt, and Paris also declined.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news