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By HaleStewart December 28, 2013 8:22 am
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International Week in Review: Holiday Shortened Week Edition

Thanks to the Christmas holiday falling mid-week, we really only have economic data for about three and a half days.  Let’s start with the news out of Japan.  First, CPI increased 1.5% YOY, a further acceleration of this statistics (which increased 1.1% in the previous YOY reading).  Retail sales increased 4% (YOY), indicating the Japanese consumer is still purchasing.  Unemployment was reported at 4%, which is probably a prime reason why wages halted their 17 month decline.  All in all, Abenomics continues to show it is still working.

Canada’s GDP printed .3% growth in October.  The best news in this report was the 1.3% increase in manufacturing, which is the result of a .5% increase in durable goods purchases and a 2.3% increase in non-durables. Canada continues to increase just enough to ward off recession.

French GDP decreased .1% Q/Q after .6% growth the previous quarter.  This is more bad news for the EU, as recent economic numbers are showing a slowdown with growth right above the 0% mark.  Further clouding the EU’s picture was Germany’s .1% import price index print and Spain’s .6% drop in PPI M/M.  Both of these figures indicate deflationary potential still exists in the region.

Finally, the US printed good numbers.  Personal income increased .2% M/M with the same report showing a .5% increase in personal consumption expenditures.  More impressively, durable goods orders increased 3.5%.  This is the second strong reading of the last three months (see the 4.2% increase from the August-September report).  While new homes sales decreased 2.1%, this follows a very large 14% increase from the previous month.

The news out of Japan continues to bode well for Abenomics; inflation is increasing and the remainder of the economy appears to be gathering momentum.  The EU continues to issue troubling numbers, especially in the inflation area.  While the region is not in full blown deflation, the overall readings indicate a big slowdown in price appreciation. News out of the US’ manufacturing sector is becoming more and more encouraging.  The last few durable goods readings along with the ISM’s anecdotal information show an economy that is poised to move above 3% annual growth.

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer

 

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