Economy Highlights

US - Retail sales climb less than forecast

Sales at retailers rose less than forecast in January, showing it will be difficult for American consumers to sustain last quarter’s pick-up in spending without bigger gains in employment. Purchases increased 0.3%, the smallest gain since a drop in June, according to Commerce Department figures today in Washington. Other reports showed manufacturing in the New York area accelerated and confidence among home builders stagnated. (Bloomberg)


US - Deficit to hit record USD1.6trn

President Barack Obama sent Congress a USD3.7trn budget that projects the federal deficit will exceed USD1trn for the fourth consecutive year in 2012 before falling to a more “sustainable” levels by the middle of the decade. The deficit for the current fiscal year is forecast to hit a record USD1.6trn-10.9% of gross domestic product-up from the USD1.4trn the administration estimated previously. It would be USD1.1trn in 2012, 7% of GDP. By 2015 it would decline to USD607bn, or 3.2% GDP.(StarBiz)


Euro - Economy expands less than economists forecast

Europe’s economy expanded less than economists forecast in the fourth quarter as cold weather curbed German output and French growth unexpectedly stalled. Gross domestic product in the euro region rose 0.3% from the previous three months, when it increased at the same rate, the European Union’s statistics office in Luxembourg said today. Economists had forecast the economy to expand 0.4%, the median of 37 estimates in a Bloomberg News survey showed.(Bloomberg)


South Korea - Unemployment rate increased to 3.6% in January

South Korea’s unemployment rate rose to 3.6% in January from a revised 3.5% in December, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of eight economists was for a jobless rate of 3.7%.(Bloomberg)


Japan - Swap spreads hit two-year high on BOJ rate view

The bond market premium to lock in interest rates for three years rose to the highest since October 2008 as Nomura Securities Co. said the end of the central bank’s zero rate policy is getting closer. The gap between the cost of swap contracts to lock in fixed rates for three years compared with one year reached 0.17 percentage point on 9 Feb, the widest since 14 Oct 2008. The spread was at 0.15562 yesterday. (Bloomberg)