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

 


While you were sleeping: IMF warns on US growth

While you were sleeping: IMF warns on US growth

March 1 (BusinessDesk) – Wall Street advanced, with gains tempered by expectations that Congress will not act to stop automatic federal spending cuts that are widely expected to put the brakes on the pace of expansion in the world's largest economy.

The International Monetary Fund warned it will downgrade its economic forecast for the US if US$85 billion of schedule federal spending cuts take effect on March 1.

If all cuts go ahead, the IMF would lower its current estimate for a 2 percent expansion for US gross domestic product this year by at least 0.5 percent, IMF spokesman William Murray told reporters at a news briefing. Global growth also would be hit.

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.14 percent, the Standard & Poor's 500 Index gained 0.18 percent, while the Nasdaq Composite Index climbed 0.37 percent.

Expectations of a slowdown in the pace of growth buoyed US Treasuries.

Commerce Department data released today showed GDP expanded at an annual rate of 0.1 percent in the final three months of 2012, compared with a previously estimated 0.1 percent contraction. That was below the 0.5 percent growth forecast by economists polled by Reuters.

"It’s pretty well baked into the cake that no action is likely to be taken on the sequestration tomorrow,” Thomas Simons, a government debt economist in New York at Jefferies Group, one of 21 primary dealers that trade with the Fed, told Bloomberg. “GDP was weaker than expected. It’s nice to see the negative sign go away, but it’s still pretty weak.”

The negative sentiment was offset by the latest news on the labour market. Applications for jobless benefits surprisingly dropped 22,000 last week to 344,000. Economists polled by Reuters had expected first-time applications to fall to 360,000.

Shares of JC Penney sank, last down 14 percent, after the company reported a net loss of US$552 million in the quarter ended February 2, compared with US$87 million a year earlier.

In Europe, the Stoxx 600 Index finished the day with a 1 percent gain from the previous close. The index has advanced for the ninth straight month and is up 3.7 percent so far this year, according to Bloomberg.

Good news on Europe's largest economy helped as German unemployment posted a surprise drop February.

Benchmark stock indexes rose in Frankfurt and Paris, both advancing 0.6 percent, while the UK’s FTSE 100 added 0.6 percent.

The political impasse in Italy remains a concern for all of Europe. In Berlin, Italian President Giorgio Napolitano said the formation of a new government would take time and that it's important to keep in mind that the Monti government remains in office for now.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news