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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (30872)	5/27/2005 11:31:15 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

OUTLOOK UK data set to support predictions of rates staying on hold Friday, May 27, 2005 12:34:30 PM afxpress.com LONDON (AFX) - There will be enough economic evidence next week to ensure that interest rates in the UK will remain on hold at the next rate-setting meeting of the Bank of England, analysts said They reckon that the data flow next week will continue to show consumption on the wane and the manufacturing sector displaying anaemic growth at best In those conditions the Monetary Policy Committee will have no impetus to change its key repo rate from 4.75 pct at the following meeting on June 9, especially in light of its last economic projections in the May Inflation Report The economic calendar kicks off on Tuesday -- there is no data on Monday due to a bank holiday in the UK -- with two gauges of consumption released Both the surveys from GfK Martin Hamblin and the Confederation of British Industry are expected to show consumption continuing to grow but not at the heady rates experienced over the last couple of years The GfK's main consumer confidence balance is expected to be unchanged at zero "While confidence remains at these levels, it does not point to a collapse in consumer expenditure and we stand by our expectation of some acceleration over the rest of 2005, staving off rate cuts until 2006," said David Page, an economist at Investec Securities Meanwhile, the CBI survey is expected to show the reported sales balance improving markedly from April's -14 to zero, but that is not indicative of a sector in rude health, analysts said A similar picture is likely to emerge with Bank of England April lending data on Wednesday. Both mortgage lending and net consumer credit are expected to be little changed on the previous months John Butler, economist at HSBC, said the mortgage approvals data in particular are not likely to be consistent, at least yet, with a collapse in the market Mortgage approvals in April are expected to fall 1,000 from the previous month's 90,000, pushing net mortgage lending down slightly to 6.8 bln stg from 7.0 bln "The message from this set of data should be more that demand for unsecured borrowing is slowing far faster than that for secured," he said Butler expects net new consumer credit during the month to fall to 1.1 bln stg, way below market expectations of 1.6 bln stg, and March's 1.9 bln Thursday's monthly house price survey from the Nationwide, the UK's largest building society, is also poised to show market activity steadying. Monthly house prices are expected to be relatively unchanged from the previous month "Price stickiness has been in evidence in recent months as valuations have held up better than measures of underlying activity such as the number of new mortgage approvals or the number of completions," said Ross Walker, an economist at Royal Bank of Scotland On the industrial side of the economy, the monthly PMI survey from the Chartered Institute of Purchasing and Supply on Wednesday is expected to show the manufacturing sector still in the doldrums

To: Square_Dealings who wrote (30872)	5/27/2005 11:36:12 AM
From: mishedlo	Respond to of 116555

Inflation, taxes erode hefty April income gains - Friday, May 27, 2005 2:45:45 PM afxpress.com WASHINGTON (AFX) - Inflation and taxes ate up most of Americans' income gains in April, pushing the savings rate to the lowest since just after 9/11, the Commerce Department reported Friday Real disposable incomes increased 0.1% in April, the fourth consecutive month of tepid inflation-adjusted, after-tax income growth. Nominal incomes increased a hefty 0.7%, as expected, in April, led by solid increases in wages and small-business income. It was the biggest gain in incomes of the year. Meanwhile, nominal consumer spending rose 0.6%, but much of the increase went straight into the gas pump. Economists surveyed by MarketWatch expected nominal spending to rise 0.8%. The personal savings rate for April fell to 0.4%, the smallest rate since the spending binge in October 2001. It's the second lowest savings rate since the Great Depression, although many economists say the figure paints a misleading picture of consumer finances When adjusted for inflation, real consumer spending rose 0.2% in April, after a big upward revision in March spending to 0.4% If spending grows at a similar rate in May and June, second-quarter consumer spending would increase slightly more than 3% annualized in the second quarter, down from 3.5% in the first quarter, said Josh Shapiro, chief economist for MFR Inc Consumer prices rose 0.4% in April as gasoline prices jumped. Prices of nondurable goods such as gasoline increased 0.9%. However, gasoline prices have retreated from the peak in mid-April Core inflation, excluding food and energy prices, climbed 0.1% in April, the slowest increase since December. Core prices have increased 1.6% on a year-over-year basis, down from 1.7% in March. Steve Stanley, chief economist for RBS Greenwich Capital, said he expects core prices to accelerate to about 2% by year-end, the top of the Federal Reserve's comfort zone for inflation The tame inflation numbers in April will likely keep the Federal Reserve on a measured pace of rate hikes. Analysts expect the Federal Open Market Committee to raise the federal funds target rate by a quarter percentage point to 3.25% in June. Real spending on durable goods rose 0.8%, while real spending on nondurable goods climbed 0.2%. Real spending on services rose 0.1%. Wages rose 0.7% in April, while proprietors' income rose 0.9%. Income on assets rose 0.4%. "We get a taste in these figures what good job growth can accomplish," said Ken Mayland, president of ClearView Economics. In April, payrolls grew by 274,000, while hourly wages increased 0.3% and the average workweek lengthened This month's release contained an upward revision to wages and salaries for all six months from October through March. Through March, wages were revised up a total of 0.9%. Disposable incomes were revised up a total of 0.7%. "An improving labor market should support wage gains in coming months," said Scott Hoyt, an economist for Economy.com. "Spending will be increasingly dependent on income as the year progresses."