US economy contracted by 0.7%

The second estimate for the first quarter GDP decreased at an annual rate of 0.7%. In comparison, the first estimate for the same period indicated a 0.2% growth.

The economic report can be found here. Bloomberg has a good write up in case you do not like reading something that looks like it came from a typewriter.

Second estimate of UK GDP revised to 0.3%

The UK GDP rose by 0.3% in the first quarter, taking the growth of the economy for nine consecutive quarters now. Bloomberg mentioned this is the longest stretch of growth since the 07/08 financial crisis. 

The main points of the GDP report are:

• UK GDP in volume terms was estimated to have increased by 0.3% between Quarter 4 (Oct to Dec) 2014 and Quarter 1 (Jan to Mar) 2015, unrevised from the previous estimate of GDP published 28 April 2015.
• GDP was estimated to have increased by 2.8% in 2014, compared with 2013, unrevised from the previously published estimate.
• Between Quarter 1 2014 and Quarter 1 2015, GDP in volume terms increased by 2.4%, unrevised from the previously published estimate.
• GDP in current prices was estimated to have increased by 0.9% between Quarter 4 2014 and Quarter 1 2015.
• GDP per head was estimated to have increased by 0.1% between Quarter 4 2014 and Quarter 1 2015. Between 2013 and 2014, GDP per head increased by 2.2%.

The full report can be found here. 

Australian private expenditure contracted in March

The capital expenditure (capex)  report for the March quarter is out. Private capex contracted by 4.4%, worse than the expected contraction of 2.3%. The December quarter recorded a contraction of 1.7%. I took some screenshots on the important areas of the report:

US consumer confidence up

The CB consumer confidence increased moderately to 94.5 in May, up from 94.3 in April. The full report can be found here.

US core durable goods up for the second month

Core durable goods orders in April grew by 0.5%, in line with expectations. In contrast, March had a growth of 0.3%. The volatility is due to the transport component included in this data.

Bloomberg has a report on this.

New Zealand had a small surplus in April

The trade balance was a surplus of 123 million in April, which was less that the forecast. The drop in dairy exports to China has negatively affected the trade balance. Dairy exports to China are now down to a level seen a year ago according to Stuff.co.nz.

The other highlights of the report include:

• Exports fall 5.5 percent 
• Imports rise 2.6 percent  
• Trade surplus in April 2015 
• Seasonally adjusted exports fall 2.0 percent 
• Seasonally adjusted imports fall 0.3 percent 
• Exchange rate movements 

KLSE below the 1800 phychological barrier

The KLSE index closed some 20.12 points lower today, representing a 1.13% drop.

This is the closing level of the KLSE index from 1/4/2015 to 25/5/2015. Data was obtained from Yahoo Finance.

The first significant drop below 1800 was on 21/5 and it has been downwards since then. It is not usual for the index to drop 1% or more in a day. The average index gain per year over the long term is around 10%, with a drop like this, it takes just 10 days to wipe out an entire year`s gain.

The only good news is that the index is just slightly above the level of the first trading day of the year. Check out my earlier post for the first quarter recap.

In short, if one had bought the index on the first day of the year, the gain to date is a mere 0.8%.

BoE confirms EU exit research

The Bank of England (BoE) has confirmed that it is undertaking a study on the implications of leaving the European Union. This was leaked when a member of the BoE governors accidentally forwarded the email to The Guardian.

Reuters has a write up on this.

Janet Yellen`s speech: US economic outlook

Janet Yellen, the chair of the Federal Reserve (FED) delivered a speech at the Greater Province Chamber of Commerce Economic Outlook.

There is nothing new in her speech as the points she touched here are based on her previous official speeches.

Her full speech can be found here.

Consumer prices rose in April, core CPI growth a 2 year high

Core CPI grew by 0.3% in April compared to a 0.2% growth in March whereas CPI dropped to 0.1% from 0.2% in March. The core CPI growth is the highest growth since January 2013 according to Bloomberg.

The inflation report can be obtained from the Bureau of Labor Statistics.