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Hopes for global recovery clouded
By Leslie Adler |
July 2, 2009, Thursday
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Print Edition
Print Edition
AN unexpected fall in United States consumer confidence, slower European bank lending and a rise in Japanese jobless to a six-year high in May have clouded the global economic recovery outlook.
Other US data showed more weakness in housing and in Midwest business activity, although there were glimmers suggesting the 18-month-old American recession could be nearing an end.
The Conference Board's US consumer confidence index fell in June, defying expectations of an increase and sparking investor concern about consumer spending.
The report "continues to imply that economic conditions, while not as weak as earlier, are nonetheless weak," said Lynn Franco, director of the board's Consumer Research Center.
In the US, the broad Standard & Poor's 500 posted its best quarter since the final quarter of 1998, rising 15.2 percent. The Nasdaq surged 20.1 percent in the quarter, and the Dow Jones industrial average rose 11 percent.
The pan-European FTSEurofirst 300 index rallied 15.9 percent in the April-June period, its best since the last three months of 1999 and the first positive quarter since the market began to melt down in mid-2007.
Billionaire investor George Soros sounded a gloomy note on Tuesday, predicting the US faces a "stop-go" economy because rising borrowing costs could generate major headwinds for the economy.
"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said at a breakfast in New York.
In other economic reports, prices of US single-family homes fell in April from March, but the pace of the decline moderated, according to Standard & Poor's/Case Shiller home price indexes. An index of 20 metropolitan areas dipped 0.6 percent, down from a 2.2 percent decline the month before.
"While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some ofthe regions," said David Blitzer, chairman of the index committee at S&P.
Business activity in the US Midwest contracted in June at a less severe rate than in May and slightly less than expected, another industry report said.
In the consumer confidence report, Americans who said jobs are "hard to get" increased to 44.8 percent from 43.9 percent the previous month.
Other US data showed more weakness in housing and in Midwest business activity, although there were glimmers suggesting the 18-month-old American recession could be nearing an end.
The Conference Board's US consumer confidence index fell in June, defying expectations of an increase and sparking investor concern about consumer spending.
The report "continues to imply that economic conditions, while not as weak as earlier, are nonetheless weak," said Lynn Franco, director of the board's Consumer Research Center.
In the US, the broad Standard & Poor's 500 posted its best quarter since the final quarter of 1998, rising 15.2 percent. The Nasdaq surged 20.1 percent in the quarter, and the Dow Jones industrial average rose 11 percent.
The pan-European FTSEurofirst 300 index rallied 15.9 percent in the April-June period, its best since the last three months of 1999 and the first positive quarter since the market began to melt down in mid-2007.
Billionaire investor George Soros sounded a gloomy note on Tuesday, predicting the US faces a "stop-go" economy because rising borrowing costs could generate major headwinds for the economy.
"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said at a breakfast in New York.
In other economic reports, prices of US single-family homes fell in April from March, but the pace of the decline moderated, according to Standard & Poor's/Case Shiller home price indexes. An index of 20 metropolitan areas dipped 0.6 percent, down from a 2.2 percent decline the month before.
"While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some ofthe regions," said David Blitzer, chairman of the index committee at S&P.
Business activity in the US Midwest contracted in June at a less severe rate than in May and slightly less than expected, another industry report said.
In the consumer confidence report, Americans who said jobs are "hard to get" increased to 44.8 percent from 43.9 percent the previous month.
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