Economy Highlights

US - Pending sales of US existing homes increased 8.2% in May

The number of contracts to buy previously owned US homes rose almost three times as much as forecast as falling prices made properties more affordable. The surprising 8.2% increase in the index of pending home resales from April followed a revised 11% drop the prior month, the National Association of Realtors said yesterday in Washington. While the measure of contract signings has been volatile this year, last month’s index level is 0.1 point lower than the January figure, indicating residential real estate has made little headway. Foreclosures, unemployment at 9.1% and stringent loan terms are holding back demand even as a decline in home prices attracts some buyers. (Bloomberg)


UK - Mortgage approvals increased less than forecast in May

UK mortgage approvals rose less than economists forecast in May, underlining the fragility of the housing market as the economy struggles to gain momentum. Lenders granted 45,940 loans to buy homes, compared with 45,447 the previous month, the Bank of England said today in London. The figures reflect the weakness of consumer confidence as accelerating inflation reduces Britons’ spending power at the fastest pace since the 1970s and concerns about job security mount. Banks are also curbing lending as they rebuild their balance sheets. (Bloomberg)


EU - June economic confidence drops to lowest in 8 months

European confidence in the economic outlook dropped to the lowest in eight months in June as policy makers struggled to craft a second bailout package for Greece. An index of executive and consumer sentiment in the 17- nation euro region fell to 105.1 from 105.5 in May, the European Commission in Brussels said yesterday. That’s the lowest since October.(Bloomberg)


EU - Greek austerity plan approved by 155 votes to 138 votes

Greek Prime Minister George Papandreou won approval of his EUR78bn package of budget cuts and asset sales, key to receiving further international financial aid. A total of 155 lawmakers in the 300-strong chamber supported the law and 138 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV yesterday. (Bloomberg)


Japan - Factory output rises at the fastest pace since 1953

Japan’s industrial production rose at the fastest pace in more than 50 years, led by carmakers as they restored operations at plants after a record earthquake and tsunami on 11 March. Factory output increased 5.7% in May from April, the biggest gain since 1953, the Trade Ministry said in Tokyo yesterday. Output in the transportation industry advanced 36% from the previous month as automakers including Toyota Motor Corp. and Nissan Motor Co. restarted production lines. (Bloomberg)