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

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news