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

 

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

ETS Review: Modelling Documents Released

Three technical documents are being released to help New Zealanders engage with the Emissions Trading Scheme (ETS) review, Climate Change Minister Paula Bennett says. More>>

ALSO:

Northland: Govt Plan Targets Transport, Web, Maori Assets

The government has released a 10-year plan to attract investors and lift economic growth in Northland, a region that perennially underperforms the rest of the country even while being endowed with natural beauty, productive land, minerals, a potential workforce, scope for manufacturing, forestry and aquaculture, and proximity to Auckland. More>>

ALSO:

Statistics: Unemployment Rate Falls To 5.3 Percent

The unemployment rate fell to 5.3 percent in the December 2015 quarter (from 6.0 percent), Statistics New Zealand said today. This is the lowest unemployment rate since March 2009. There were 16,000 fewer people unemployed than in the September ... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news