Strong data from the US this week coincided with signs of shaky performances elsewhere.
The Conference Board Leading Economic Index, which is a composite of 10 US indicators, was published Thursday and it increased 0.9% in October to 105.2 (2004 = 100), following a 0.7% rise in September, and no change in August.
“The LEI rose sharply in October, with all components gaining over the previous six months,” said Ataman Ozyildirim, economist at the Conference Board, a private New York research firm. “Despite a negative contribution from stock prices in October, and minimal contributions from new orders for consumer goods and average workweek in manufacturing, the LEI suggests the US expansion continues to be strong.”
Second-hand homes sold at a 5.26m annual rate in October, the most since September 2013, the National Association of Realtors reported Thursday.
Weekly initial jobless claims fell by 2,000 to 291,000 in the week ended November 15 according to the Department of Labor, from an upwardly revised 293,000 in the prior period. It was the 10th straight week the number of applications for unemployment benefits has been lower than 300,000, which hasn’t happened since 2000, according to Bloomberg.
UK retail sales rose by 0.8% in October compared with September, according to the Office for National Statistics and compared with October 2013, sales were up 4.3%.
Over the year, average prices fell by 1.5%, the largest decline since December 2002, helped by a drop in the price of petrol.
Meanwhile UK manufacturing output remains above average and is broad-based, but sluggish export demand means the recovery has slowed compared to earlier in the year, according to the CBI’s latest Industrial Trends Survey.
On Thursday the flash manufacturing/ services composite PMI (purchasing managers' index) for November, fell from 52.1 in October to 51.4 this month, just above no-change 50 level and the lowest reading in 16 months.
The index for Germany dropped to 52.1, a 16 month low and in France there was a contraction, with the index up from 48.2 in October to 48.4 this month.
Next week, Jean-Claude Juncker, European Commission president, is expected to announce a plan for a €300bn investment programme aimed at boosting EU growth over the next three years.
The Financial Times says from information leaked to it, the Commission is considering the creation of investment funds seeded with cash from either the EU budget or the European Investment Bank as the centrepiece of a new growth plan. The Commission hopes to entice private investors to finance European infrastructure projects, with Brussels assuming most of the downside risk.
While a stimulus of €300bn of investment would, if fully effective, be equivalent to 0.8% of the EU’s GDP, the FT says that the plan looks set to avoid creating any new public debt.
Emmanuel Macron, French economy minister, said this week this week that the plan may well be “disappointing” and needs to be funded with “real money.”
On Monday it was reported that Japan's economy unexpectedly shrank for the second consecutive quarter, marking a technical recession in the world's third largest economy.
Gross domestic product (GDP) dropped an annualised 1.6% from July to September, compared with forecasts of a 2.1% rise.
That followed a revised 7.3% shrinkage in the second quarter, which was triggered by a rise in the sales tax by 3 to 8% in April.
Exports and manufacturing data were better in Japan while the PMI for Chinese manufacturing fell to its lowest level in six months in November
Taro Aso, Japan's finance minister, said on Friday the yen which has fallen 14% since early September, has tumbled too far.