february

UK deficit beats estimates in February

by on March 18, 2010

UK deficit beats estimates in February

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UK deficit beats estimates in February

UK: Public sector soars above 60% of GDP in February

by on March 18, 2010

UK: Public sector soars above 60% of GDP in February

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UK: Public sector soars above 60% of GDP in February

Producer Prices in U.S. Fall More Than Forecast on Decline in Fuel Costs

March 17, 2010

By Courtney Schlisserman March 17 (Bloomberg) — Wholesale prices in the U.S. fell in February more than anticipated, led by a drop in fuel costs and signaling there are few inflation pressures building in the early stages of the economic recovery. The 0.6 percent decrease in prices paid to factories, farmers and other producers was the biggest since July and followed a 1.4 percent January increase, according to figures from the Labor Department in Washington. Excluding food and fuel, so-called core prices climbed 0.1 percent. Companies will probably continue to hold the line on prices as the expansion has yet to soak up enough excess capacity or create jobs. The report bears out forecasts by Federal Reserve policy makers, who yesterday retained a pledge to keep the main interest rate near zero for an “extended period,” and said “inflation is likely to be subdued for some time.” “Core producer price inflation is pretty dormant,” Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, said before the report. The Fed can stay “right where they’ve been for quite a while.” Treasury securities and stock-index futures climbed after the report. The yield on the benchmark 10-year note fell to 3.63 percent at 8:38 a.m. in New York from 3.65 percent late yesterday. The contract on the Standard & Poor’s 500 Index rose 0.2 percent to 1,157.5. Bigger Drop Economists forecast a 0.2 percent decrease in February producer prices, according to the median of 70 projections in a Bloomberg News survey. Estimates ranged from a drop of 0.6 percent to a 0.5 percent increase. Prices excluding food and energy were forecast to rise 0.1 percent after a 0.3 percent gain the month earlier, according to the survey median. Compared with a month earlier, energy costs dropped 2.9 percent in February, led by diesel fuel and gasoline. The cost of food increased 0.4 percent An increase in wholesale auto prices pushed core costs higher. The measure was restrained by a drop in the cost of capital equipment, led by declines in construction machinery and a record decrease in prices of office furniture. Producer prices are one of three monthly inflation measures reported by the Labor Department. The cost of imported goods decreased 0.3 percent in February, the government said yesterday. It is scheduled to release the consumer price index tomorrow. Fed Policy Fed policy makers yesterday gave no hint they were preparing to raise the target interest rate on overnight loans between banks any time soon. Low levels of capacity use, high unemployment, tame inflation and stable expectations on the likely trajectory of prices were among the “economic conditions” the central bankers cited for the lack of urgency. The Fed has kept the federal funds rate target for overnight loans in the zero to 0.25 percent range since December 2008. Policy makers began using the “extended period” language in March 2009 and have repeated it at each meeting since. Producer prices were up 4.4 percent compared with a year earlier, down from a 4.6 percent gain in the 12 months to January. Core producer prices climbed 1 percent from February 2009, matching January’s year-over-year increase. Fuel Costs A jump in petroleum costs since early last year may keep year-over-year comparisons elevated in coming months. The price of a barrel of crude oil traded on the New York Mercantile Exchange averaged $76.45 last month. In February 2009 it averaged $39.26. Consumers in the Reuters/University of Michigan preliminary survey, released March 12, said they expect an inflation rate of 2.7 percent over the next five years. Those figures are tracked by Fed policy makers as well. After expanding at a 5.9 percent rate in the fourth quarter, the fastest pace of growth in four years, economists surveyed by Bloomberg News earlier this month anticipate the world’s largest economy will grow at an average 2.75 percent rate in the first half of this year, less than previously projected. The analysts also lowered inflation estimates. The Fed’s preferred price measure, which tracks consumer spending and excludes food and fuel costs, will probably rise 1.2 percent this year, according to this month’s survey, the smallest gain since 1962. The central bank’s long-term forecast for the gauge calls for gains in a range of 1.7 percent to 2 percent. Spare Capacity Low capacity utilization may also be helping companies refrain from raising prices. Plant use was 72.7 percent in February, according to a Fed report released March 15. The gauge averaged 80 percent over the past 20 years. Royal Ahold NV , the owner of Stop & Shop supermarkets, is among companies keeping prices low to entice cash-strapped U.S. shoppers contending with an unemployment rate near 10 percent. Chief Executive Officer John Rishton began cutting prices, lowering costs and refurbishing stores in the U.S. two years ahead of competitors like Supervalu and Kroger Co. That boosted sales and profitability at Ahold’s U.S. chains, which account for more than half of the Amsterdam-based company’s revenue. Food prices will continue to fall during the first half of this year, Rishton said earlier this month. To contact the reporter on this story: Courtney Schlisserman at cschlisserma@bloomberg.net

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American PPI falls 0.6% in February

March 17, 2010

American PPI falls 0.6% in February

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Investors Buy Stocks as Concern Over Inflation Eases, Merrill Survey Finds

March 16, 2010

By Sarah Jones March 16 (Bloomberg) — Risk appetite rebounded as concern eased that interest rates will have to rise later this year to cool inflation, prompting investors to cut cash holdings and buy equities, a BofA Merrill Lynch Global Research report showed. Seventy percent of survey respondents, who together manage about $589 billion, expect the Federal Reserve to keep interest rates at a record low until at least the fourth quarter of 2010, as concern that inflation will return dropped sharply. Fifty percent said they expect the European Central Bank to keep its benchmark interest rate unchanged until 2011. “The big change for investors is the drop in inflation worries,” Gary Baker , head of European equity strategy at BofA Merrill, said at a press briefing in London today. “Investors are now much less concerned about when they expect interest rates to rise and see it more as a 2011 event.” Survey respondents boosted holdings of U.S. and Japanese stocks this month to levels not seen since at least mid-2008, while turning more bearish on Europe. The MSCI World Index , a gauge of stocks in 23 developed countries, has climbed 8.5 percent from this year’s low on Feb. 8 amid optimism the European Union will ensure that Greece doesn’t default on its sovereign debt. Risk Appetite Index BofA Merrill Lynch’s risk appetite index rose to 44 from 42 as a net 46 percent of money managers were “overweight” stocks in March, near the highest level in three years. That compares with 33 percent in February, which was the lowest level in five months. Asset allocators cut cash holdings to levels in line with their benchmarks, from a net 12 percent “overweight” in February, the survey showed. Europe remained out of favor with money managers as a shift toward U.S. stocks continued. A net 21 percent of respondents were “underweight” the euro region, up from 11 percent in February, even as concerns ease over Greece’s deficit. Instead, investors raised their holdings in U.S. stocks with a net 19 percent now “overweight” for the region. That’s up from 5 percent in February and the highest since mid-2008. In Japan, asset allocators turned “overweight” for the first time since July 2008. A net 6 percent said they own more of the nation’s equities than benchmark indexes, the most bullish reading since August 2007. “I think it’s more an anti-European vote by investors rather than a vote for U.S. and Japanese equities,” said Baker. “I wouldn’t be surprised to see a pick-up in Europe next month. The region will ultimately benefit” from easing concern over Greece’s finances. More than 75 percent of respondents said they don’t expect Greece to default on its sovereign debt, while 52 percent expect a “last-minute European Union bailout.” The Merrill Lynch survey of 207 fund managers was conducted from March 5 to March 11. As of January 2009 Merrill Lynch changed the format of its survey and no longer publishes full historical data. To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net .

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Kia Motors achieves 39.5% jump in February sales

March 16, 2010

Kia Motors achieves 39.5% jump in February sales

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US factory output edges up in February

March 16, 2010

US factory output edges up in February

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Kia Motors posts 50.6 percent rise in February global sales

March 16, 2010

Kia Motors posts 50.6 percent rise in February global sales

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India’s February inflation climbs to 9.89%

March 15, 2010

India’s February inflation climbs to 9.89%

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China’s FDI rises 1.1% in February

March 15, 2010

China’s FDI rises 1.1% in February

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China’s FDI rises 1.1% in February

March 15, 2010

China’s FDI rises 1.1% in February

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Canada’s jobless rate falls to 8.2% in February

March 14, 2010

Canada’s jobless rate falls to 8.2% in February

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US February retail sales climb 0.3%

March 13, 2010

US February retail sales climb 0.3%

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Retail Sales in U.S. Unexpectedly Rose in February as Shoppers Braved Snow

March 12, 2010

By Bob Willis March 12 (Bloomberg) — Sales at U.S. retailers unexpectedly climbed in February as shoppers braved blizzards to get to the malls, signaling consumers will contribute more to economic growth. Purchases increased 0.3 percent, the fourth gain in the past five months, Commerce Department figures showed today in Washington. Figures for the prior two months were revised down, taking some of the shine off of today’s data. Sales excluding autos rose 0.8 percent, exceeding all estimates. A report last week showing the economy lost fewer jobs than anticipated in February signaled employment is on the verge of accelerating, a development that would spur spending in coming months. Macy’s Inc. was among retailers that beat estimates last month as customers overcame the weather to shop for Valentine’s Day gifts and spring merchandise, a sign the expansion is broadening beyond manufacturing. “The storms were apparently not quite as disruptive as anticipated,” said Adam York , an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, whose forecast for a 0.6 percent gain excluding autos was the highest of those surveyed. “As we start adding jobs in the spring, employees will gain income and hours and retail sales should follow.” Stocks reversed gains after a separate report showed consumer sentiment unexpectedly declined this month. The Standard & Poor’s 500 Index fell 0.2 percent to 1,148.19 at 10:12 a.m. in New York after rising as much as 0.3 percent. Consumer Sentiment The Reuters/University of Michigan preliminary index of consumer confidence fell to 72.5 in March from a final reading of 73.6 a month earlier. The index was forecast to rise to 74, according the median estimate in a Bloomberg News survey of 68 economists. Inventories at U.S. businesses were little changed in January as sales climbed, signaling companies may need to increase orders to prevent shelves from emptying, the Commerce Department reported today. Retail sales were projected to fall 0.2 percent, according to the median estimate of 77 economists in a Bloomberg survey. Forecasts ranged from a decline of 1 percent to a 0.9 percent gain. The Commerce Department revised January data down to show a 0.1 percent increase compared with an originally reported 0.5 percent gain. Purchases excluding autos were projected to increase 0.1 percent, according to the survey median. GDP Figures Excluding autos, gasoline and building materials — the retail group the government uses to calculate GDP figures for consumer spending — sales increased 0.9 percent after a 0.6 percent gain. The government uses data from other sources to calculate the contribution from the three categories excluded. Ten of 13 major categories showed increases in sales last month, led by electronics and appliances stores, and grocery stores. Purchases of electronics climbed 3.7 percent, the biggest gain since January 2009. Receipts at bars and restaurants climbed 0.9 percent, the most since April 2008. Auto sales dropped 2 percent after decreasing 1.5 percent in January. The storms that pushed seasonal snowfall totals to records in parts of the eastern U.S. made some dealers lots impenetrable, while a recall by Toyota Motor Corp . may have also hurt auto demand. Chain Stores Chain stores turned in a better-than-forecast performance last month, compared with a low point last year, industry figures showed last week. Macy’s Inc., Abercrombie & Fitch Co. and Gap Inc. beat analysts’ estimates in February as holiday sales tempted consumers to go shopping in a month of record snowfalls. February comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate. It was the sixth straight monthly gain and the biggest in 27 months. Purchases fell 4.1 percent in February 2009, Ken Perkins , president of Swampscott, Massachusetts-based Retail Metrics, said last week. TJX Corporation Inc ., an off-price apparel chain, reported a 16 percent sales increase in the four weeks ended Feb. 27 from a year earlier. “We achieved these sales despite the harsh snowstorms that affected many regions in the country,” said Sherry Lang , vice president for investors, in a teleconference on March 4. “The month ended on a stronger note than we had anticipated.” Figures last week that showed the economy lost fewer jobs than anticipated last month signal employment is on the verge of accelerating, a development that would spur spending in coming months. Job Losses The Labor Department reported March 5 the economy lost 36,000 jobs in February, even accounting for job losses caused by the blizzards. The unemployment rate held at 9.7 percent for a second month, indicating the labor market is stabilizing. Consumer spending rose at a 1.7 percent annual pace in the first quarter, the government reported last month. Economists surveyed by Bloomberg last week forecast growth to average 2.25 percent in the first half, compared with the 3.3 percent average during the two decades through 2007. Households are still trying to overcome a record loss of wealth during the recession as home values and stock prices plunged, reasons why spending will be slow to recover. The economy grew at a 5.9 percent annual pace in the fourth quarter, the strongest showing in more than six years as companies tried to stabilize inventories, the government reported last month. Economists surveyed by Bloomberg this month forecast growth will slow to 2.8 percent in this quarter. To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

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Retail Sales rise in February to support economic outlook of the U.S

March 12, 2010

Retail Sales rise in February to support economic outlook of the U.S

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Inflation Eroding China’s Bank Deposits Signals Zhou Must Increase Rates

March 11, 2010

By Bloomberg News March 12 (Bloomberg) — China’s inflation rate outstripped returns on household savings for the first time in 16 months, making it harder for officials to damp rising expectations for price gains. Consumer prices rose a more-than-forecast 2.7 percent in February, the fastest pace in 16 months, the statistics bureau said in Beijing yesterday. The number, probably boosted by seasonal factors, compares with a benchmark one-year deposit rate of 2.25 percent. Chinese policy makers aim to prevent the world’s fastest- growing major economy from overheating after reports showed exports rebounded, industrial production accelerated and new loans exceeded forecasts. Central bank Governor Zhou Xiaochuan may raise interest rates as early as in the next three weeks, Standard Chartered Bank Plc, Nomura Holdings Inc. and Royal Bank of Canada said after this week’s data. February’s inflation number “will increase the social and political pressure for a rate hike in the near term,” said Ma Jun , chief China economist at Deutsche Bank AG in Hong Kong. “A growing number of households will now realize that their deposits in the banking system are losing purchasing power.” Since October, the government has highlighted the importance of managing inflation expectations as the nation rebounds from the global financial crisis and commodity costs rise. Eleven out of 15 economists surveyed yesterday said that interest rates may rise in March or April. Barclays Capital yesterday increased its projection for China’s inflation rate this year to 3.5 percent from a previous estimate of 3 percent. ‘Sooner or Later’ Premier Wen Jiabao aims to hold full-year inflation around 3 percent after banks flooded the financial system with money to drive an economic rebound. Gross domestic product grew 10.7 percent last quarter and Zhou said March 6 that anti-crisis policies, including the yuan’s peg to the dollar, must end “sooner or later.” Inflation above deposit rates may encourage people to spend, fueling gains in consumer and asset prices, said Brian Jackson , an emerging-markets strategist at Royal Bank of Canada in Hong Kong. He said last month’s 35 percent gain in M1, the measure of money supply that includes demand deposits, signals households’ intentions to buy “big-ticket items,” property or stocks. Lu Ting , an economist at Bank of America-Merrill Lynch in Hong Kong, said that year-on-year inflation numbers may be misleadingly high because of low bases for comparison and seasonal distortions. He said month-on-month and quarter-on- quarter calculations would show milder price gains, with bank deposits still giving positive returns. Snow Storms Inflation may slow in March on improved weather after snow and storms pushed up food costs at the start of the year, statistics bureau spokesman Sheng Laiyune told reporters at a briefing in Beijing yesterday. Food prices rose 6.2 percent in February from a year earlier. The data released yesterday showed that China’s industrial output rose 20.7 percent in the first two months of 2010, the most in more than five years. Banks extended 700 billion yuan ($103 billion) of new loans in February, central bank said. That compared with 1.39 trillion yuan in the previous month and 1.07 trillion yuan a year earlier. The median estimate was 600 billion yuan. M2 , a broad measure of money supply, rose 25.5 percent, compared with a 26 percent gain in January. The government target is 17 percent growth this year. Retail sales rose 17.9 percent in the first two months from a year earlier, and urban fixed-asset investment gained 26.6 percent. Rebounding Exports Trade data on March 10 showed exports rebounding faster than economists forecast and a property-market report said prices climbed in February by the most in almost two years. Economists often look at January and February numbers together to eliminate distortions caused by a one-week Lunar New Year holiday. China’s 2010 data is also boosted by comparisons with year-earlier levels depressed by the financial crisis. Commodity costs, reforms of China’s energy and resource pricing, and the effects of last year’s expansion of credit may add to inflation pressures this year, China’s top planning agency told lawmakers last week. Baoshan Iron & Steel Co. and spirits manufacturer Kweichow Moutai Co. are among companies to have pushed up prices. Producer-price inflation climbed to 5.4 percent in February from 4.3 percent in January, the statistics bureau said yesterday. Pegged Currency The People’s Bank of China hasn’t raised benchmark interest rates since December 2007, before the financial crisis deepened. The one-year lending rate is 5.31 percent. China has also effectively pegged the yuan at about 6.83 per dollar since July 2008 to help exporters. Non-deliverable yuan forwards rose for a sixth day yesterday, indicating that traders expect that the peg will break and the currency will gain 2.9 percent in the next year. The central bank has twice raised lenders’ reserve requirements this year. Deputy Governor Su Ning said this week that those moves were to prevent monetary conditions becoming “excessively loose” as the government continues to implement what it describes as a “moderately loose” stance. Policy makers are targeting lending of 7.5 trillion yuan, 22 percent less than last year’s actual figure, and pledging to crack down on property speculation. The government has tightened second-home mortgages and banks have reduced discounts on home- loan rates. — Li Yanping , Kevin Hamlin , Zhang Dingmin . Editors: Paul Panckhurst , Chris Anstey . To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net

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Foreclosures in U.S. Rise at Slowest Pace in Four Years on Obama Efforts

March 11, 2010

By Dan Levy March 11 (Bloomberg) — U.S. foreclosure filings rose at the slowest pace in four years in February as the government sought to reduce record bank seizures, RealtyTrac Inc. said. A total of 308,524 properties received a notice of default, auction or seizure last month, or one in 418 households, the Irvine, California-based seller of default data said today in a statement. Filings rose 6 percent from a year earlier, the smallest increase since RealtyTrac began tracking annual changes in January 2006. They declined 2 percent from January. The Obama administration’s main effort to keep people in their homes resulted in more than 830,000 trial loan modifications for delinquent borrowers through January, according to the Treasury Department. Still, filings were up for the 50th straight month in February on an annual basis and topped 300,000 for the 12th consecutive month, RealtyTrac said. “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity,” RealtyTrac Chief Executive Officer James J. Saccacio said in a statement. About 116,000 mortgages have been permanently modified under the government’s program, compared with as many as 4 million targeted by December 2012. New data will be released March 15, Meg Reilly , a Treasury spokeswoman, said in an e-mail. Bank Repossessions Bank seizures are increasing the number of homes for sale. Lenders took back 78,683 properties last month, up 6 percent from February 2009 and down 15 percent from a peak in December, RealtyTrac said. More than 2 million empty homes were on the market in the fourth quarter, according to the Census Bureau. “Government programs are helping to keep more supply from coming out,” Brian Bethune , chief financial economist at IHS Global Insight in Lexington, Massachusetts, said in an interview. “We’ve got a disjointed market where most of the housing supply is coming from foreclosures rather than building new homes.” Bethune predicted a “high” rate of foreclosures for at least the next 12 months. RealtyTrac expects record bank seizures this year, said Rick Sharga, executive vice president for marketing. Default notices totaled 106,208 in February, down 3 percent from a year earlier and up 3 percent from January, RealtyTrac said. Defaults peaked at more than 142,000 in April. Scheduled auctions totaled 123,633 last month, up 16 percent from February 2009 and down 1 percent from January. The peak was more than 144,000 in August. Nevada, California Nevada had the highest foreclosure rate for the 38th straight month in February, with one in 102 households receiving a filing. Arizona and Florida tied for second at one in 163 households. California ranked fourth at one in 195 households, followed by Michigan at one in 226. Utah, Idaho, Illinois, Georgia and Maryland rounded out the 10 highest foreclosure rates. The most filings were in California , with 68,562, down 15 percent from a year earlier. Florida was second with 54,032, up 16 percent, and Michigan was third at 20,028, a 59 percent rise. Illinois had the fourth-highest total filings with 17,312, Arizona had 16,718 and Texas had 12,638. The six states accounted for 61 percent of the U.S. total, RealtyTrac said. Georgia, Ohio, Nevada and Maryland rounded out the top 10. New York Area Filings rose 14 percent from a year earlier to 3,750 in New Jersey. They climbed 3.3 percent to 2,294 in Connecticut, and dropped 20 percent to 3,237 in New York. Las Vegas had the highest foreclosure rate for cities with a population of more than 200,000. One in 90 households there got a filing. Cape Coral-Fort Myers, Florida, was second at one in 92. Six metro areas in California or Arizona had decreases in filings from January, with Phoenix showing the biggest drop at almost 18 percent. Port St. Lucie, Florida, showed a 66 percent increase, said RealtyTrac, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population. To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net .

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Australian unemployment climbs in February

March 11, 2010

Australian unemployment climbs in February

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China’s inflation accelerates in February

March 11, 2010

China’s inflation accelerates in February

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China’s Vehicle Prices Rise Most in at Least Four Years Amid Higher Demand

March 10, 2010

By Bloomberg News March 11 (Bloomberg) — China’s vehicle prices rose the most in at least four years in February as consumers took advantage of government incentives to buy new cars and trucks. Prices rose 1.49 percent last month from a year earlier, Cheng Xiaodong , an official with the National Development and Reform Commission’s vehicle monitoring division, said in a telephone interview today in Beijing. Chinese consumers bought 1.21 million automobiles in February, 46 percent more than a year earlier, as vehicle sales continued to surge after the government extended subsidies for customers trading in old vehicles and for rural car buyers. Prices may moderate as demand growth slows, Cheng said. “Vehicle prices may stabilize or face downside pressure after the first quarter,” he said. “As sales growth slows, some dealers are no longer charging extra for consumers who want vehicles on an earlier date, like they did in the past months.” Passenger-vehicle prices, which exclude trucks and buses, rose 0.36 percent in February from a year earlier and were unchanged from January, Cheng said. The Chinese government last year halved the sales tax on new vehicles to 5 percent and offered a total of 5 billion yuan ($732 million) in cash to customers who trade in old vehicles, insulating the country from slumping global demand. The subsidies helped China overtake the U.S. as the world’s biggest auto market for the first time in 2009. China announced plans on Dec. 10 to scale back the measures, which included increasing the tax on new vehicles with engines of 1.6 liters or smaller to 7.5 percent. — Tian Ying . Editors: Terje Langeland , Ian Rowley To contact Bloomberg News staff for this story: Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net

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China Inflation, Production Accelerate, Adding Pressure for Stimulus Exit

March 10, 2010

By Bloomberg News March 11 (Bloomberg) — China’s inflation reached a 16- month high, industrial output climbed and new loans exceeded forecasts, adding to the case for the government to pare back stimulus measures. Consumer prices rose 2.7 percent from a year earlier, the National Bureau of Statistics said in Beijing today, compared with the 2.5 percent median estimate of 29 economists surveyed by Bloomberg News. A weeklong holiday may have boosted prices. Production expanded 20.7 percent in the first two months of the year after an 18.5 percent gain in December. Premier Wen Jiabao aims to hold full-year inflation around 3 percent after banks flooded the financial system with money to drive a rebound from the global recession. Gross domestic product grew 10.7 percent last quarter and central bank Governor Zhou Xiaochuan said March 6 that anti-crisis policies, including the yuan’s peg to the dollar, must end “sooner or later.” “With economic growth quickening to more than 10 percent and record lending flowing through the financial system, economic overheating is a high possibility,” Qu Hongbin , chief China economist at HSBC Holdings Plc in Hong Kong, said before today’s release. “The government will stay very proactive this year and an inflation rate approaching 3 percent or topping the target may trigger an interest-rate increase.” Lending Growth Banks extended 700 billion yuan ($103 billion) of new loans in February, central bank data showed today. That compared with 1.39 trillion yuan in the previous month and 1.07 trillion yuan a year earlier. The median estimate was for 600 billion. Stocks held gains after the data, with the Shanghai Composite Index rising 0.4 percent as of 10:16 a.m. local time, and the MSCI Asia Pacific index advancing 0.5 percent. M2, a measure of money supply, rose 25.5 percent, compared with a 26 percent gain. The government targets 17 percent M2 growth for this year. Retail sales rose 17.9 percent in the first two months from a year earlier, and urban fixed-asset investment gained 26.6 percent. Retail sales grew 22.1 percent in February, the bureau said. Economists often look at January and February numbers together to eliminate distortions caused by a one-week Lunar New Holiday. China’s 2010 data is also boosted by comparisons with year-ago levels depressed by the financial crisis. ‘Entire Toolkit’ The government “will need to use the entire toolkit, including higher policy rates and a stronger currency” to achieve Wen’s inflation target, Brian Jackson , an emerging- market strategist at Royal Bank of Canada in Hong Kong, said ahead of today’s numbers. Trade data yesterday showed exports rebounding faster than economists forecast, while a property market report showed prices climbing by the most in almost two years. Commodity costs, reforms of China’s energy and resource pricing, and the effects of last year’s expansion of credit may add inflation pressures this year, China’s top planning agency told lawmakers last week. Baoshan Iron & Steel Co. and spirits manufacturer Kweichow Moutai Co. are among companies to have pushed up prices this year. Producer-price inflation climbed to 5.4 percent in February from 4.3 percent in January, the statistics bureau said today. Yuan Peg The central bank hasn’t raised benchmark interest rates since December 2007, before the financial crisis deepened. The one-year lending rate is at 5.31 percent and deposit rate is at 2.25 percent. China has also effectively pegged the yuan at about 6.83 per dollar since July 2008 to help exporters. The central bank has twice raised lenders’ reserve requirements this year. Deputy Governor Su Ning said this week that those moves were to prevent monetary conditions becoming “excessively loose” as the government continues to implement what it describes as a “moderately loose” stance. Policy makers are targeting lending of 7.5 trillion yuan, 22 percent less than last year’s actual figure, and pledging to crack down on property speculation. The government has tightened second-home mortgages and banks have scaled back favorable home loan rates. — Li Yanping . Editors: Paul Panckhurst , Chris Anstey . To contact Bloomberg News staff for this story: Li Yanping in Beijing at +86-10-6649-7568 or yli16@bloomberg.net

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Australia Employment Rises Less-Than-Estimated; Jobless Rate Gains to 5.3%

March 10, 2010

By Jacob Greber March 11 (Bloomberg) — Australian employers added fewer workers in February than economists forecast, giving central bank Governor Glenn Stevens scope to slow the pace of future interest-rate increases. The number of people employed rose 400 from January, the smallest gain in six months, the statistics bureau said in Sydney today. The median estimate of 25 economists surveyed by Bloomberg was for an increase of 15,000. The jobless rate rose to 5.3 percent from a revised 5.2 percent. Weaker employment growth may prompt consumers to trim spending in coming months. Governor Stevens last week raised borrowing costs by a quarter point to 4 percent for the fourth time in five meetings, and signaled further moves as the nation’s economic growth accelerates. “We’ve had almost 200,000 new jobs created over the previous five months, so there was always going to be a pullback at some time,” Adam Carr , a senior economist at ICAP Australia Ltd. in Sydney, who forecast employers would cut 15,000 jobs last month, said ahead of today’s decision. “Leading indicators are suggesting solid jobs growth” this year rather than an acceleration, he added. The number of full-time jobs gained 11,400 in February and part-time employment decreased 11,000, today’s report showed. Cadbury, Boeing Cadbury Plc, the U.K.-based confectioner, said last month it will fire 60 workers in Australia when it closes its Melbourne warehouse this year. Boeing Co. said last week it will shut its plant in Sydney in 2012 and consolidate its Australian aerospace manufacturing in Melbourne. The move may see 350 jobs lost in Sydney with 300 positions offered in Melbourne, the company said on March 4. Investors are betting there is a 26 percent chance of a quarter-point increase in the overnight cash rate target to 4.25 on April 6, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 8:56 a.m. The chance of a 25 basis point move by the end of next quarter stands at 100 percent. Stevens is the first Group of 20 central banker to raise borrowing costs in 2010 after leading the world in boosting benchmark rates three times last quarter amid mounting evidence Australia’s economy will strengthen after skirting the global recession in 2009. The moves have taken the Reserve Bank’s overnight cash rate target to 4 percent from a half-century low of 3 percent at the start of October. Inflation Threat “Australia starts the current expansion with considerably less spare capacity than earlier thought likely, and with less than at the starting point of previous expansions,” central bank Assistant Governor Philip Lowe said yesterday. “We will need to keep a strong focus on improving the supply side of the economy so that demand can grow solidly without putting upward pressure on inflation,” he said. Gross domestic product rose last quarter at the fastest pace in almost two years, climbing 0.9 percent from the three months through September as companies increased investment. Growth is also being stoked by Prime Minister Kevin Rudd ’s decision to spend A$22 billion ($20 billion) on roads, railways and schools. GDP is forecast by the central bank to climb 3.25 percent in the three months through December 2010 from a year earlier, after gaining an annual 2 percent in the fourth quarter of 2009. Business investment is currently equivalent to around 16 percent of GDP, which is “not far below its peak level in the past four decades and is expected to rise a little further over the next couple of years,” Lowe said yesterday in Sydney. Job Advertisements Australian advertisements for job vacancies jumped 19.1 percent in February, the most in a decade, while consumer and business confidence advanced, reports showed this week. Increased spending on projects such as the Chevron Corp.- led A$43 billion Gorgon gas venture in Western Australia is worsening a skills shortage. Construction on the project began this year and will generate up to 10,000 jobs. Marius Kloppers , chief executive officer of BHP Billiton Ltd., the world’s biggest mining company, said on Feb. 10 that the skills shortage in Australia’s resources industry is emerging faster than expected. More than A$100 billion of resources projects in Western Australia are likely to generate about 40,000 construction jobs and 12,500 permanent positions, a state government report released last year shows. Population Growth Prior to today’s release, government reports showed Australian employers added 194,600 jobs in the five months through January, the biggest increase in more than three years. The nation’s unemployment rate has held below 5.9 percent since July 2003. “Employment is growing strongly, more than keeping pace with the fastest migration-fueled growth in population in decades,” Kieran Davies , chief economist at RBS Group Australia Ltd. in Sydney, said ahead of today’s report. In contrast, the unemployment rate in the U.S. was 9.7 percent in February, and 9.9 percent in January among European Union countries. Australia’s participation rate, which measures the labor force as a percentage of the population aged over 15, fell to 65.2 percent in January from 65.3 percent, today’s report showed. To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

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Chinese exports jump 45.7% in February

March 10, 2010

Chinese exports jump 45.7% in February

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Obama Proving Pessimists Wrong as Rebounding Economy Converges With Stocks

March 10, 2010

By Mike Dorning March 10 (Bloomberg) — The political consensus may be that President Barack Obama ’s handling of the economy has been weak. The judgment of money in all its forms has been overwhelmingly positive, and that may be the more lasting appraisal. One year after U.S stocks hit their post-financial-crisis low on March 9, 2009, the benchmark Standard & Poor’s 500 Index has risen more than 68 percent, and it’s up more than 41 percent since Obama took office. Credit spreads have narrowed. Commodity prices have surged. Housing prices have stabilized. “We’ve had a phenomenal run in asset classes across the board,” said Dan Greenhaus , chief economic strategist for Miller Tabak & Co. in New York. “If he was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the president.” The economy has also strengthened beyond expectations at the time Obama took office. The gross domestic product grew at a 5.9 percent annual pace in the fourth quarter, compared with a median forecast of 2.0 percent in a Bloomberg survey of economists a week before Obama’s Jan. 20, 2009, inauguration. The median forecast for GDP growth this year is 3.0 percent, according to Bloomberg’s February survey of economists, versus 2.1 percent for 2010 in the survey taken 13 months earlier. “You have to give them — along with the Federal Reserve – - a lot of credit,” said Joseph Carson , director of economic research at AllianceBernstein LP in New York. “A year ago, there was panic, as well as concern. And a lot of the expectations were not only that we were going to have declines in activity but they would stretch all the way to 2010, if not 2011.” Job Losses Ease Since then, monthly job losses have abated, from 779,000 during the month Obama took office to 36,000 last month. Corporate profits have grown; among 491 companies in the S&P 500 that reported fourth-quarter earnings, profits rose 180 percent from a year ago, according to Bloomberg data. Durable goods orders in January were up 9.3 percent from a year earlier. Inflation is tame, and long-term interest rates remain low. Still, the economy has become a political burden for Obama. Voters give his administration little credit for its performance, while the unemployment rate remains high, at 9.7 percent in February. Public opinion of Obama’s handling of the economy has gone from 59 percent approval in February 2009 to 61 percent disapproval this February, according to Gallup polls. Critical of Deficit The budget deficits the administration has run up have stirred criticism from investment managers and economists, as well as voters. The Congressional Budget Office projects Obama’s spending proposals would produce a record $1.5 trillion budget deficit this year and a $1.3 trillion deficit in 2011. The investment returns and economic data don’t impress some Obama critics. “Coming off a level that was ridiculously low isn’t much to boast about,” said Dean Baker , co-director of the Washington-based Center for Economic and Policy Research. “What most people care about is the economy creating jobs. It’s still not.” Mark Zandi , chief economist at Moody’s Economy.com , said the public’s opinion of the economy is likely to improve as the gains companies have made begin to translate into more jobs and higher wages. “Businesses are doing very well but households have yet to benefit,” Zandi said. “Households will eventually benefit, but they’ll have to see it before they believe it.” 300,000 Jobs Seen The U.S. may add as many as 300,000 jobs in March, the most in four years, David Greenlaw , chief fixed-income economist at Morgan Stanley in New York, said in a Bloomberg Radio interview. Zandi said the economic rebound is largely a result of the policies of the White House and Federal Reserve. He cited the bank bailout, the Fed’s low-interest-rate policy and support for credit markets, and the Obama administration’s stimulus plan, bank stress tests and backing of Fannie Mae and Freddie Mac. “When you take it all together, the response was massive and unprecedented and ultimately successful,” Zandi said. Phil Swagel , who was assistant Treasury secretary for economic policy in George W. Bush ’s administration, considers himself a critic of Obama, though he said the White House policies were crucial. “They could have done a better job, but their economic policies, including the stimulus, have helped move the economy in the right direction,” said Swagel, now an economics professor at Georgetown University’s McDonough School of Business. Productivity Gains While jobs have been slow to come back even as GDP is growing, the gains in productivity during the past year will strengthen the economy, said Greenhaus of Miller Tabak. Productivity grew at a 6.9 percent annual pace in the fourth quarter, capping the biggest one-year gain since 2002. While small businesses still have difficulty getting loans, credit markets have thawed. Spreads on investment-grade corporate bonds have narrowed from 5.13 percentage points on the day Obama took office to 1.63 percentage points on March 8, according to Barclays Capital. Rates on 30-year fixed mortgages have dropped from an average 5.20 percent on Inauguration Day to 5.03 percent on March 8, according to Bankrate.com . Housing prices, which dropped since 2007 and proved a drag on the economy, have firmed. The median sales price for existing homes in January was the same as a year earlier. International currency markets are bullish on the dollar, which has rallied more than 8 percent since Nov. 25, according to the Intercontinental Exchange’s Dollar Index. And commodity prices are up more than 32 percent since Obama took office, according to the UBS Bloomberg Commodity Index. “There’s definitely legs in this recovery,” said John Silvia , chief economist for Wells Fargo Securities. “There’s progress being made at the national level. But in their own situations, a lot of people are still struggling.” To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net .

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China’s Accelerating Inflation May Spur Zhou to Raise Rates ‘Within Weeks’

March 9, 2010

By Bloomberg News March 10 (Bloomberg) — China’s inflation probably accelerated and exports climbed in February, according to surveys of economists, increasing the likelihood of the central bank raising interest rates from a five-year low. Consumer prices rose 2.5 percent from a year before, the most in 16 months, according to the median of 29 estimates in a Bloomberg News survey before tomorrow’s report. While the gain was likely exaggerated by seasonal factors, economists project the momentum to continue, sending the rate to as high as 4.4 percent during the year, a separate survey showed last week. Inflation, property speculation and risks for banks are among Premier Wen Jiabao ’s prime concerns after a record 9.59 trillion yuan ($1.4 trillion) of loans jumpstarted growth last year. Central bank Governor Zhou Xiaochuan said March 6 that while stimulus policies must end “sooner or later,” China needs to be cautious in timing an exit because a global recovery “isn’t solid.” “The biggest danger to the economy is inflation,” said Wang Qian , an economist with JPMorgan Chase & Co. in Hong Kong. “The government needs to manage inflation expectations and may raise interest rates within weeks.” Wang sees a 0.27 percentage point increase in the one-year lending and deposit rates as early as this month. In January, consumer prices rose 1.5 percent, the third monthly increase after a nine-month run of deflation. Producer Prices Price pressures are stemming from rising commodity costs, an overhaul of resource prices and the expansion of credit, the nation’s top economic planning agency said in a report to lawmakers last week. Producer prices may have climbed 5.1 percent in February, the biggest gain in 16 months, the Bloomberg News survey showed. Baoshan Iron & Steel Co. , China’s biggest publicly traded steelmaker, increased prices for March delivery as much as 7.4 percent because of higher demand and raw material costs. Kweichow Moutai Co., China’s biggest producer of spirits by market value, has also pushed up prices. Wen told the National People’s Congress on March 5 in Beijing he’s targeting inflation of “about 3 percent” for 2010. Last week’s survey of economists indicated that he may miss that goal, with the median estimate coming in at 3.4 percent. Meantime, trade figures scheduled for release today may show exports rose 38.3 percent from a year earlier, the third monthly increase and the biggest gain in three years, according to the survey median. Imports may have climbed 38 percent, leaving a trade surplus of $7.15 billion. Trade Surplus Commerce Minister Chen Deming said March 6 that the trade surplus fell 50.2 percent in January and February combined from a year earlier as demand within China, the world’s fastest- growing major economy, boosted imports. The nation has held its currency at about 6.8 per dollar since July 2008 to aid exporters, and policy makers have signaled they’re looking for a sustained export recovery before loosening the peg. “We must be very cautious about the timing of normalizing the policies, and this includes the renminbi rate policy,” Zhou said, using another term for the Chinese currency. China’s economic data this week may also show an easing in credit growth. New loans may have declined to 600 billion yuan in February from 1.39 trillion yuan in January after the government increased reserve requirements for banks, soaking up cash that could fuel inflation. Officials are aiming to pare loan growth to 7.5 trillion yuan for 2010. ICBC Lending Industrial & Commercial Bank of China Ltd. , the world’s largest lender by market value, will lend less this year than in 2009, President Yang Kaisheng said at a Beijing briefing March 7. “The key danger is excess liquidity in the banking system,” said Gardner Yeh, an economist at Jih Sun Securities Co. in Taipei. “The government needs to closely monitor credit creation and manage inflation expectations.” He sees another increase in banks’ reserve requirements as early as April. Urban fixed-asset investment may have increased 25.6 percent in the first two months of this year from the same period in 2009, the survey showed. Industrial output may have gained 19.5 percent. Retail sales for January and February combined climbed 18.7 percent and industrial production advanced 19.5 percent, the survey showed. Economists combine January and February numbers to eliminate the distortion from a Lunar New Year holiday, something that likely also affected the consumer-price report. Analysts are debating the danger of bubbles in the nation’s asset markets as a consequence of the stimulus. Harvard University’s Kenneth Rogoff and Victor Shih of Northwestern University have warned in the past two weeks that a crisis could result in coming years. At the same time, Stephen Roach , the chairman of Morgan Stanley Asia, said in a note yesterday that he saw a “false alarm” in tales of asset bubbles or an imminent banking crisis. While there are “very real” risks of asset and credit-market excesses, policy makers will act to ease the danger, he said. “Pro-active Beijing policy makers are about to dispel yet another false alarm over the imminent perils of Chinese credit and asset bubbles,” Roach said. — Chinmei Sung , Li Yanping , Jay Wang . Editors: Paul Panckhurst , Chris Anstey To contact the Bloomberg News staff on this story: Chinmei Sung in Taipei at csung4@bloomberg.net

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Business confidence in Australia rose for the second straight month in February

March 9, 2010

Business confidence in Australia rose for the second straight month in February

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Retail Sales Probably Fell as Snowstorms Blocked Trips to Malls, Dealers

March 7, 2010

By Bob Willis March 7 (Bloomberg) — Sales at U.S. retailers probably declined in February as blizzards kept Americans away from malls and auto-dealer showrooms, economists said before a government report this week. Purchases dropped 0.2 percent after a 0.5 percent gain the prior month, according to the median estimate of 56 economists surveyed by Bloomberg News before Commerce Department figures on March 12. Other reports may show the trade gap widened in January and consumers grew more confident this month. Figures last week showing the U.S. lost fewer jobs in February than anticipated, overcoming the effects of the snowstorms that caused some companies to temporarily close, signals employment is on the verge of accelerating. More hiring and wage increases will be critical in lifting consumer spending, the biggest part of the economy. “Retail sales likely would have squeaked out a modest gain if not for the severe snowstorms,” said Ryan Sweet , a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. Nonetheless, “consumers will have to spend more freely for the recovery to sustain itself.” A Labor Department report March 5 showed the economy lost 36,000 jobs in February and the unemployment rate held at 9.7 percent for a second month, indicating the labor market is stabilizing. President Barack Obama , speaking at a Washington-area energy company, said the job report was “actually better than expected.” Even so, he said the number of unemployed is “more than we should tolerate” and urged Congress to pass a jobs bill to help lower unemployment. Auto Sales Auto sales fell last month to an annual pace of 10.4 million vehicles from 10.8 million in January, according to industry data last week. Toyota Motor Corp. sales fell 8.7 percent from a year earlier as it struggled with global recalls that halted demand for some models. Ford Motor Co., overcoming the snowstorms that curbed showroom traffic, beat General Motors Co. in monthly sales for the first time since 1998. Excluding automobiles , retail sales were probably little changed after a 0.6 percent gain the prior month, according to the Bloomberg survey. Chain stores turned in a better-than-forecast performance last month, compared with a low point last year, industry figures showed last week. Macy’s Inc. , Abercrombie & Fitch Co . and Gap Inc. beat analysts’ estimates in February as holiday sales and spring collections tempted consumers to go shopping in a month of record snowfalls. Same-Store Sales February comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate. It was the sixth straight monthly gain and the biggest in 27 months. Purchases fell 4.1 percent in February 2009, Ken Perkins , president of Swampscott, Massachusetts-based Retail Metrics, said last week. TJX Corporation Inc ., an off-price apparel chain, reported a 16 percent sales increase in the four weeks ended Feb. 27 from a year earlier. “We achieved these sales despite the harsh snowstorms that affected many regions in the country,” said Sherry Lang, investor vice president, in a teleconference on March 4. “The month ended on a stronger note than we had anticipated.” Households are feeling less pessimistic. The Reuters/University of Michigan preliminary index of consumer sentiment for March probably rose to 73.8 from 73.6 a month earlier, according to the Bloomberg survey before the March 12 release. Fewer Claims In a sign that job losses are abating, a report from the Labor Department on March 11 may show initial jobless claims fell to 460,000 last week from 469,000 the previous week, according to economists surveyed. Stocks have recovered from a January slump prompted by concerns of a possible Greek default and government plans to boost oversight over banks. The Standard & Poor’s 500 Index has gained 6 percent since the end of January. The economy grew at a 5.9 percent annual pace in the fourth quarter, the strongest showing in more than six years as companies tried to stabilize inventories, the government reported last month. Economists surveyed by Bloomberg early last month forecast growth will slow to 3 percent in this quarter. A Commerce Department report on March 12 may show business inventories rose 0.2 percent in January after dropping 0.2 percent the prior month, according to economists surveyed. As companies begin rebuilding stockpiles and consumer purchases recover, demand for imports is rising. That probably caused the trade deficit to widen to $41 billion in January from $40.2 billion in December, according to the survey median before a March 11 report from the Commerce Department. The collapse in trade earlier last year brought the deficit down to a near- decade low of $25.8 billion in May. To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

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Turkey’s inflation soars to 10.13% in February

March 6, 2010

Turkey’s inflation soars to 10.13% in February

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U.S. Consumer Credit Increases for First Time in a Year in Confidence Sign

March 5, 2010

By Vincent Del Giudice March 5 (Bloomberg) — Borrowing by U.S. consumers unexpectedly rose in January for the first time in a year, led by auto and student loans, a sign Americans are gaining confidence in the economy. Consumer credit increased $5 billion, or 2.4 percent at an annual rate, the Federal Reserve said today in Washington. Borrowing dropped $4.6 billion in December, more than first estimated. The figures track credit card debt and non-revolving loans, including those for automobile purchases. Stocks rose after the report indicated that some banks may be more willing to lend as the economy recovers from the worst recession since World War II. Growth may get a bigger lift from consumer purchases that account for about 70 percent of the economy when companies start to hire. “Spending is holding up,” said David Wyss , chief economist at Standard & Poor’s in New York. “People are feeling a little bit more comfortable. They’re sticking their heads out of the shell a little more.” The economy lost 36,000 jobs in February, less than anticipated, after a decline of 26,000 a month earlier even as snowstorms in parts of the nation forced some employers to temporarily close, Labor Department figures showed earlier today. The unemployment rate held at 9.7 percent. Stocks gained for a sixth day and Treasury securities fell after a smaller-than-estimated loss of jobs in February. The Standard & Poor’s 500 Index rose 1.4 percent to 1,138.70 at 4:46 p.m. in New York. The 10-year Treasury note declined, pushing up the yield eight basis points to 3.68 percent. Decline Was Forecast Economists had forecast consumer credit would drop by $4.5 billion in January after a previously reported $1.7 billion decrease in December, according to the median of 33 estimates in a Bloomberg News survey. Projections ranged from a decrease of $12.3 billion to an increase of $2.4 billion. The January gain in credit was the biggest since July 2008, according to the Fed’s data. Non-revolving debt , including automobile and mobile-home loans, rose by $6.6 billion after a $4.9 billion gain. The Fed’s report doesn’t cover borrowing secured by real estate. Auto sales in the U.S. cooled in January to a seasonally adjusted annual rate of 10.8 million, according to industry statistics. The pace slowed in February to 10.36 million. Non-Revolving Loans Non-revolving credit, on an unadjusted basis, rose $10.3 billion at commercial banks. Federal government non-revolving loans, such as those for student loans, also increased an unadjusted $10.3 billion. The increase in student loans suggests people “are going back to school to ride it out because of the difficult labor market,” said Michael Feroli , chief U.S. economist at JPMorgan Chase & Co. in New York. Revolving debt , such as credit cards, fell by $1.7 billion in January, according to the Fed’s statistics. Revolving credit has fallen 16 straight months, the longest series of declines since the Fed began keeping those records in 1968. The January drop was the smallest since July. Consumer spending during the final three months of last year rose at a 1.7 percent annual rate following an increase of 2.8 percent in the third quarter, Commerce Department figures showed on Feb. 26. Spending contributed to economic growth of 5.9 percent at annual rate, the best performance in more than six years. A gain in February sales at retailers open at least a year indicates sustained spending by consumers. Comparable-store sales climbed 4.1 percent, according to Retail Metrics Inc. It was the sixth straight gain and the biggest in 27 months. Abercrombie & Fitch Co. said yesterday that sales rose 5 percent, while Macy’s Inc., the second-biggest U.S. department- store company, reported a 3.7 percent gain. “The consumer is starting to come out of hibernation and feel better about their situation,” Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said yesterday in an interview. More than three-fourths of retailers in the Retail Metrics survey beat estimates, he said. To contact the reporter on this story: Vincent Del Giudice in Washington vdelgiudice@bloomberg.net

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Payrolls in U.S. Fall Less Than Economists’ Forecasts; Jobless Rate Holds

March 5, 2010

By Timothy R. Homan March 5 (Bloomberg) — The U.S. unemployment rate held at 9.7 percent and payrolls fell less than forecast, indicating the labor market strengthened even as East Coast snowstorms forced some employers to temporarily close. Payrolls dropped 36,000 last month after a revised 26,000 decrease in January, figures from the Labor Department in Washington showed today. Manufacturers added workers for a second straight month, the first back-to-back gain since 2006, while construction companies fired workers. Stocks and the dollar jumped while Treasuries slid as investors reckoned the economy would have added jobs were it not for seasonal snowfall records in cities including Washington and Philadelphia. The U.S. needs employment growth to sustain a recovery from a recession that has cost 8.4 million jobs since December 2007. “This is strong evidence that the labor market is moving firmly in a positive direction,” said Richard DeKaser , chief economist at Woodley Park Research in Washington, who had forecast the unemployment rate would stay at 9.7 percent. “It’s clear that except for the weather effect we would be seeing a very positive payrolls report.” The Standard & Poor’s 500 Index rose 0.7 percent to 1,131.1 at 10 a.m. in New York. The dollar strengthened 1.4 percent to 90.27 yen from 89.02 yesterday. The yield on the 10-year Treasury note rose seven basis points to 3.67 percent. Economists’ Forecasts Payrolls were forecast to decrease by 68,000, according to the median estimate of 82 economists surveyed by Bloomberg News. Estimates ranged from a decline of 150,000 to a gain of 30,000. The jobless rate was projected to increase to 9.8 percent. Forecasts ranged from 9.5 percent to 10.1 percent. The unemployment rate was unchanged even as more people entered the workforce. One clue about the effect of the weather on employment may come from the survey of households, which the Labor Department uses to calculate the unemployment rate. Today’s report showed 1 million Americans said bad weather prevented them from getting to work during the survey week. About 290,000 people on average say bad weather has prevented them from getting to work, according to February figures going back three decades. Federal Reserve Companies have been reluctant to hire even after the world’s largest economy grew at a 5.9 percent annual rate in the last three months of 2009, the most in six years. The labor market may be slow to recover the jobs lost since the recession began, giving the Federal Reserve scope to keep interest rates low and putting pressure on President Barack Obama and lawmakers to foster job growth. The so-called underemployment rate — which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking — rose to 16.8 percent from 16.5 percent. AMR Corp. is among companies continuing to trim employment, while Caterpillar Inc. and General Motors Co. have announced they will recall some workers dismissed during the depths of the economic slump. Two storms blanketed parts of the country in early February, the second coming during the week that included the 12th of the month, the government’s survey week. Economists at Macroeconomic Advisers LLC in St. Louis projected the weather would reduce the payroll count by anywhere from 150,000 to 220,000 workers. The drop will probably be reversed this month, they said. January 1996 The most recent storm of similar intensity that occurred during a survey week was in January 1996. The current data for payrolls that month, which have gone through several revisions since the initial estimate, show a 19,000 drop in employment followed by a gain of 434,000 in February. Monthly employment gauges that are less influenced by weather point to job-market stability. The Institute for Supply Management’s employment gauge in non-manufacturing businesses, which covers almost 90 percent of the economy, rose to an almost two-year high. The group’s corresponding manufacturing index climbed to the highest level since 2005. Companies in February cut the fewest jobs in two years, according to data from ADP Employer Services. Similarly, employers last month announced the fewest job cuts in more than three years, according to a report by the job-placement firm Challenger, Gray & Christmas Inc. Government Jobs Today’s report from the Labor Department showed that government payrolls decreased by 18,000 in February. State and local governments reduced employment by 25,000 during the month, while the federal government added 7,000. The increase at the federal level reflected in part the hiring of 15,000 temporary workers to conduct the 2010 census. The Census Bureau said it will hire 1.15 million temporary workers in the first half of the year to conduct the population count that takes place every 10 years. The program may have the biggest impact on payroll figures in April through June, when the bulk of the hiring will take place, and will then subtract from the job count the following months after the work is done. Payroll figures for manufacturers, construction firms and retailers are most likely to gauge the extent to which weather affected overall job numbers since those industries are more likely to be influenced by severe storms, economists said. The average work week and weekly earnings were probably affected by the snow, they said before the report. Hours Worked Fall The average work week for all workers fell to 33.8 hours in February from 33.9 hours the prior month. The number of part- time workers for economic reasons climbed to 8.8 million in February from 8.3 million the previous month. Factory payrolls increased 1,000 in February after rising 20,000 in the prior month. The median forecast by economists called for a drop of 15,000. Payrolls at builders fell 64,000 last month after decreasing 77,000. Financial firms reduced payrolls by 10,000, after a 13,000 decline the prior month. Service industries, which include banks, insurance companies, restaurants and retailers, added 24,000 workers after an increase of 27,000 in January. Some companies continue to trim payrolls. American Airlines, the world’s second-largest carrier, said yesterday that it would eliminate jobs of 230 baggage handlers, ramp workers and cargo employees nationwide. The reductions at American, a unit of AMR, will begin March 13, spokeswoman Missy Latham said in an interview. Accenture Hiring Other firms are adding workers. Accenture Plc, the world’s second-largest technology-services company, is boosting payrolls by about 50,000 workers, with as many as 9,000 jobs being added in the U.S. by the end of August. “We are seeing a very broad uplift globally” in demand, John Campagnino , director of worldwide recruiting, said in a March 3 interview. He said the trend “brings us right back to the pre-recession” levels. The number of temporary workers increased 48,000 in February. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff. Retail payrolls were little changed after a 42,000 gain. The economy grew at a 5.9 percent annual rate in the fourth quarter, the biggest gain in six years, according to data from the Commerce Department released last week. Economists surveyed by Bloomberg last month projected the jobless rate will average 9.8 percent in 2010 and end the year at 9.5 percent. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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Pandit Thanks American Taxpayers for Citigroup’s $45 Billion 2008 Lifeline

March 4, 2010

By Bradley Keoun March 4 (Bloomberg) — Citigroup Inc. Chief Executive Officer Vikram Pandit thanked U.S. taxpayers for the $45 billion bailout the bank got in late 2008 that helped it stave off a run on deposits. “This investment built a bridge over the crisis to a sound footing on the other side, and it came from the American people,” Pandit told a congressional panel overseeing the government’s bank-bailout program today. “I want to thank our government.” Pandit, 53, answered questions about the impact of government assistance on the New York-based bank. The five- person Congressional Oversight Panel, led by Harvard Law School Professor Elizabeth Warren , is charged with reviewing the Treasury’s expenditures under the $700 billion Troubled Asset Relief Program. Warren, 60, said Citigroup is still receiving support in the form of an “implicit government guarantee,” because the U.S. has shown a willingness to “pay any price” to keep the bank from failing. “Were it not for the market’s view that Citigroup enjoyed an implicit government guarantee,” she said, “it would cost Citigroup more to do business and it would be viewed as a riskier investment.” The bank’s debt is perceived as the riskiest among its peers, based on trading in the market for credit-default swaps, a form of bond insurance. The annual rate to insure $10 million of Citigroup’s debt for five years is $204,000, almost triple the rate for New York-based JPMorgan Chase & Co. ‘Warranted and Necessary’ Herbert Allison , the Treasury Department’s assistant secretary for financial stability, said Citigroup’s bailout was “warranted and necessary.” “Due to the deterioration in confidence, there was concern that, without government assistance, Citigroup would not be able to obtain sufficient funding in the market over the following days,” Allison said. If Citigroup had been allowed to falter, investors might have lost faith in the strength of other banks, he said. “A further deterioration of Citigroup would have led investors to doubt the ability and willingness of U.S. policy makers to support U.S. banking institutions and financial markets,” he said, adding that the bank’s presence in more than 100 countries also played a role in the government’s decision. ‘Liquidity Pressures’ “Given Citigroup’s substantial international presence, global liquidity pressures would likely have increased and confidence in U.S. assets more broadly could have declined,” he said. “All of these effects would likely have led to a much greater worsening of the global financial and economic turmoil.” Citigroup, the third-biggest U.S. bank by assets, repaid $20 billion of bailout funds in December. The Treasury still owns a 27 percent stake in the company after converting $25 billion of the funds last year into common stock. The government has a $1.15 billion paper profit on the stake, based on its 7.7 billion shares and the current stock price of $3.40. Pandit said the government had received more than $3 billion of dividends from Citigroup. It also still owns $5.3 billion of the bank’s junior debt, which was received as the premium for an asset-guarantee program that Citigroup canceled late last year. The Treasury said in December it plans to liquidate its common stock this year. ‘Debt of Gratitude’ “Citi owes a debt of gratitude to American taxpayers,” Pandit said. “We look forward to helping them realize value on that investment.” Pandit said the company accepted the second part of its bailout in 2008 after short-sellers, who bet on share-price declines, had driven the price of Citigroup’s stock below $3. When asked whether Citigroup was a “healthy institution” in November 2008, when it got the second bailout, Pandit answered, “Yes.” The CEO said he didn’t recall discussions with the Treasury and regulators about the bank’s health in the week before the bailout. Panel member Damon Silvers replied that he didn’t think Pandit was giving “credible” answers. Pandit’s trip to Capitol Hill marks his first public hearing in Washington since February 2009, when he was called to testify with fellow TARP-recipient CEOs Jamie Dimon of JPMorgan, Lloyd Blankfein of Goldman Sachs Group Inc. and John Mack of Morgan Stanley. Citigroup Losses At the February hearing, Pandit pledged to cut his own salary to $1 a year until the bank returned to profitability. Citigroup lost $1.6 billion in 2009, compared with the record $27.7 billion net loss in the previous year. “I get the new reality and I will make sure Citi gets it as well,” Pandit said at the time. He ended up getting $125,001 in 2009, because he collected paychecks in the weeks before he made the pledge. Pandit wasn’t invited in January when Dimon, Blankfein, Mack and Bank of America Corp. CEO Brian Moynihan were called to appear together before the Financial Crisis Inquiry Commission, a separate congressionally chartered panel. To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net .

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U.S. Retail Sales Jump the Most in Two Years as Shoppers Defy Snowstorms

March 4, 2010

By Matt Townsend March 4 (Bloomberg) — Sales at Abercrombie & Fitch Co., Macy’s Inc. and Gap Inc. beat analysts’ estimates in February as holiday sales and spring collections tempted consumers to go shopping in a month of record snowfalls. Abercrombie said today that sales at stores open at least a year climbed 5 percent. Analysts’ had projected a 6.7 percent decline, the average of estimates compiled by Retail Metrics Inc. So-called comparable-store sales at Macy’s, the second- biggest U.S. department-store company, rose 3.7 percent, more than an average projection of a 2 percent gain. Sales were helped by better-than-expected store traffic on the weekend of Valentine’s Day and President’s Day and an increase in retailers selling spring collections at full price, said Ken Perkins , president of Swampscott, Massachusetts-based Retail Metrics. “These results support the thinking that retail has momentum going into Easter,” Brian Sozzi , an analyst with Wall Street Strategies Inc. in New York, said in a telephone interview. “March could be another good month.” Cincinnati-based Macy’s rose 2 cents to $20.05 at 11:40 a.m. in New York Stock Exchange composite trading. San Francisco-based Gap climbed 16 cents to $21.92. Abercrombie , based in New Albany, Ohio, jumped $3.76 to $40 and recorded its biggest intraday gain since May 7. The 31-company Standard & Poor’s 500 Retailing Index gained 1 percent. ‘Out of Hibernation’ Total February U.S. comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate, Perkins said in a telephone interview. It’s the sixth straight monthly gain and the biggest in 27 months. Retail sales fell 4.1 percent in February 2009, according to Perkins. “The consumer is starting to come out of hibernation and feel better about their situation,” Perkins said today in a telephone interview. More than three-fourths of retailers in the Retail Metrics survey beat estimates, he said. Sales at Gap, which runs Old Navy, rose 3 percent, twice the average estimate. Aeropostale Inc. , American Eagle Outfitters Inc. and Limited Brands Inc. also topped projections. Department-store chain Nordstrom Inc. and discount retailer Ross Stores Inc. both showed double-digit gains that exceeded predictions. Target Corp. posted a 2.4 percent gain, more than twice the estimate. Snow Effect Record-breaking snows have fallen across the U.S. East Coast this season, including 80.4 inches (204 centimeters) in Baltimore, 64.5 inches above normal. February was the snowiest month on record in New York City’s Central Park, according to the National Weather Service. Macy’s estimated that same-store sales would have climbed 5 percent last month were it not for the storms, Chief Executive Officer Terry J. Lundgren said in a statement. The snow may have shaved as much as 2 percent off all sales, Retail Metrics said. March will probably get a boost from Easter purchases as the holiday falls on April 4, eight days earlier than last year, Perkins said. Sales fell 4.8 a year ago. To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

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Stocks in U.S. Climb as Jobless Claims Drop, Productivity Beats Estimates

March 4, 2010

By Craig Trudell March 4 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a fifth straight gain, following analyst upgrades, a jump in retail sales and reports signaling improvement in jobless claims and productivity. Walt Disney Co. climbed 2.5 percent after Bank of America Corp. recommended the shares. Coca-Cola Co., the world’s biggest soda maker, rose 1.3 percent as UBS AG lifted its recommendation on the stock. Abercrombie & Fitch Co. surged 11 percent to lead a rally in retailers on higher-than-estimated February sales. Stocks pared gains as a drop in oil dragged down energy shares and technology companies fell on signs of weakening demand. “The market might like these numbers,” Richard Sichel , chief investment officer at the Philadelphia Trust Co., which manages $1.4 billion, said of today’s economic data. “The key to the economy continuing to improve is employment, which can also help housing. We’re not necessarily going to see wonderful numbers, but we see numbers that are improving.” The S&P 500 increased 0.1 percent to 1,119.6 at 12:26 p.m. in New York. The Dow Jones Industrial Average gained 20.18 points, or 0.2 percent, to 10,416.94. Financial shares led gains as the government said first- time jobless claims fell by 29,000 to 469,000 last week and productivity climbed at a 6.9 percent annual rate in the fourth quarter, capping the biggest one-year gain since 2002. “This series of reports are on target, which means you probably won’t get an outlier” in the government’s payroll report tomorrow, said Doug Roberts , chief investment strategist for Shrewsbury, New Jersey-based Channel Capital. Tomorrow’s Jobs Data Payrolls probably fell by 63,000 after declining 20,000 in January, according to the median forecast of 62 economists surveyed by Bloomberg News. Figures from the Labor Department may show the unemployment rate increased to 9.8 percent from 9.7 percent. The data is due tomorrow at 8:30 a.m. in Washington. Stocks fluctuated earlier as housing data and declines in energy and technology companies briefly erased an early advance. Southwestern Energy Co. led declines in 35 of 40 energy companies in the S&P 500 as a stronger dollar dragged oil down from a seven-week high. Ciena Corp. slumped 7.8 percent after the maker of network gear posted a bigger-than-estimated loss. The S&P 500 yesterday rose to the highest level since Jan. 20 on reports showing improvement in service industries and the labor market. The benchmark index for U.S. stocks slid as much as 8.1 percent from this year’s high on Jan. 19 amid concern that a weak job market and widening budget gaps in Greece, Spain and Portugal would threaten the economic recovery. This week’s advance trimmed the retreat to less than 3 percent. Housing, Factory Data Lennar Corp. led a slump among homebuilders after the number of contracts to buy previously owned homes unexpectedly fell 7.7 percent in January, according to a National Association of Realtors report. Factory orders increased 1.7 percent, in line with forecasts, as a surge in commercial aircraft demand overshadowed a slump in orders for computers and machinery, Commerce Department data showed. Disney climbed 2.5 percent to $32.43 in New York. BofA Merrill Lynch Global Research raised its recommendation on the world’s biggest media company to “buy” from “neutral,” citing releases “Alice In Wonderland” and “Toy Story 3.” Coca-Cola advanced 1.3 percent to $54.63. UBS lifted its recommendation on the shares to “buy” from “neutral,” citing “solid, mid-single digit global volume growth.” Boeing Jumps Boeing Co. rose 1.4 percent to $65.32. The world’s second- largest commercial planemaker was raised to “neutral” from “sell” at UBS AG, which increased its forecast for 2010 deliveries. Fifth Third Bancorp dropped 1.5 percent to $12.35. Sanford C. Bernstein & Co. cut its recommendation on the stock to “market perform” from “outperform,” saying “strong relative performance has driven the stock through tangible book value.” Wal-Mart Stores Inc. rose as much as 0.8 percent to $54.09 after increasing its annual dividend to $1.21 for the fiscal year ending January 2011, from $1.09 a share last year. Abercrombie & Fitch Co. had the biggest gain in the S&P 500, surging 11 percent to $40.19. The teen-apparel retailer said February comparable-store sales advanced 5 percent. Citigroup Inc. raised the shares to “hold” from “sell.” Macy’s Inc. and Gap Inc. also posted sales that topped estimates. Total February U.S. comparable-store sales climbed 4.1 percent to top Retail Metrics Inc.’s 3 percent estimate, Ken Perkins , president of the research firm, said in a telephone interview. It’s the sixth straight monthly gain and the biggest in 27 months. Retail sales fell 4.1 percent in February 2009, according to Perkins. AK Steel Holding Corp. rose 4.9 percent to a six-week high of $23.92 on renewed speculation that the fourth-largest U.S.- based steelmaker may be acquired. Alan McCoy , a spokesman for AK Steel, didn’t immediately return calls for comment. To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.net .

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Citigroup’s Pandit Said to Plan to Thank Taxpayers for $45 Billion Bailout

March 3, 2010

By Bradley Keoun March 4 (Bloomberg) — Citigroup Inc. Chief Executive Officer Vikram Pandit plans to tell U.S. taxpayers he’s grateful for the $45 billion bailout that helped stave off a deposit run at the bank in 2008, a person close to the company said. Pandit, scheduled to appear in Washington today before a panel overseeing the bank-bailout program, will acknowledge that the infusion stabilized Citigroup, said the person, who requested anonymity because the planned testimony isn’t public. Pandit will thank the government for providing the money, the person said. Pandit, 53, is scheduled to answer questions about the impact of government assistance on the New York-based bank. The five-person Congressional Oversight Panel, led by Harvard Law School Professor Elizabeth Warren, is charged with reviewing the Treasury’s expenditures under the $700 billion Troubled Asset Relief Program. Citigroup, the third-biggest U.S. bank by assets, repaid $20 billion of bailout funds in December. The Treasury holds a 27 percent stake after converting $25 billion of funds into common stock. The government currently has a $1.15 billion paper profit on the stake, based on its 7.7 billion shares and yesterday’s stock price of $3.40. The Treasury said in December it plans to liquidate its common stake this year. Molly Meiners , a Citigroup spokeswoman in Washington, declined to comment. Pandit testified in Washington in February 2009 alongside fellow CEOs Jamie Dimon of JPMorgan Chase & Co., Lloyd Blankfein of Goldman Sachs Group Inc., John Mack of Morgan Stanley and the since-retired Kenneth Lewis of Bank of America Corp. At the February 2009 hearing, Pandit pledged to cut his own salary to $1 a year until the bank returned to profitability . Citigroup lost $1.6 billion in 2009, compared with the record $27.7 billion net loss in the previous year. “I get the new reality and I will make sure Citi gets it as well,” Pandit said then. Pandit ended up getting $125,001 last year because he collected paychecks in early 2009 before he made the pledge. To contact the reporter on this story: Bradley Keoun in New York at bkeoun@bloomberg.net .

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Fed Says Economy Improved This Year at `Modest’ Pace in Nine of 12 Regions

March 3, 2010

By Scott Lanman March 3 (Bloomberg) — The U.S. economy improved in nine of the Federal Reserve’s 12 regions in January and February while being hampered by snowstorms in the eastern U.S., the central bank said today. “In most cases the increases were modest,” the Fed said in its Beige Book business survey, published two weeks before the Federal Open Market Committee meets to set monetary policy. Consumer spending increased in many regions, while commercial real estate and loan demand were “weak” and labor markets “soft,” the Fed said. The report informs Fed policy makers ahead of their next meeting on March 16. While Chairman Ben S. Bernanke reiterated the Fed would leave rates very low for an “extended period” in congressional testimony last week, Kansas City Fed President Thomas Hoenig , the longest-serving policy maker, wants to eliminate the phrase because the financial crisis is fading. “Consumer spending improved slightly in many districts since the last survey, but severe snowstorms in early February limited activity in some districts,” the Fed said today. The Atlanta and St. Louis regions reported “mixed” economies, while the Richmond district said the economy “slackened or remained soft across most sectors” owing to the weather. Today’s Beige Book reflects information collected on or before Feb. 22 and summarized by staffers at the Kansas City Fed. The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, the most in six years, as the country recovers from the worst recession since the 1930s. ‘Soft’ Hiring While payroll reductions slowed in most areas, “hiring plans still remained generally soft,” and pressures on employers to raise wages were “minimal,” the Fed said. Economists surveyed by Bloomberg News anticipate a government report March 5 will show U.S. payrolls declined by 63,000 in February, in part because snowstorms caused some businesses to close. The jobless rate probably increased to 9.8 percent from 9.7 percent, based on the median estimate, remaining close to a 26-year high. The U.S. has lost 8.4 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. A private report today said U.S. companies last month cut 20,000 jobs, the fewest in two years, according to data from ADP Employer Services, following a revised 60,000 drop the prior month. Retail Sales Retail sales rose in many areas, while the Atlanta, Kansas City and St. Louis districts reported lower-than-expected figures or declines, the Beige Book said. The Commerce Department said this week that personal spending rose 0.5 percent in January, the fourth straight increase. Household purchases account for about 70 percent of the economy. Atlanta-based Home Depot Inc., the largest U.S. home- improvement retailer, last month projected comparable-store sales will climb 2.5 percent from February 2010 to January 2011 after dropping 6.6 percent last year. Cincinnati-based Macy’s Inc. said sales at established stores will grow by as much as 2 percent after slumping 5.3 percent in the 12 months through January. The Fed’s Beige Book said non-financial services were “steady or improved” in the majority of districts, and manufacturing “increased further” in most areas. A separate report today showed service industries in the U.S. expanded in February at the fastest pace since October 2007. The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 53 from 50.5 the prior month. Readings higher than 50 signal growth. Housing Improves The Fed said housing markets improved in some areas, were “weak or softened further” in three districts, including New York, and little changed or mixed in two other regions. The weather hampered the market along the East Coast. Sales of previously owned U.S. homes unexpectedly declined in January for a second month, falling 7.2 percent to an annual pace of 5.05 million, while the median sales price was unchanged from the same month last year, the National Association of Realtors said Feb. 26. In December, sales decreased a record 16.2 percent. The government extended a tax credit in November aimed at boosting home purchases. At the same time, the Fed this month plans to complete purchasing $1.25 trillion of mortgage-backed securities and $175 billion of federal agency debt, a program aimed at reducing home-loan rates over the past year. Tax Credit “Most districts attributed stronger home sales to the home-buyer tax credit, with several contacts apprehensive about future sales once the credit expires on April 30,” the Fed said. In commercial real estate, the Fed said the market “remained weak or declined further in most districts,” and all areas said construction was “weak or slow, except for some moderate boost” from federal stimulus and public construction. Some regions “noted slight stabilization or modest signs of improvement,” the Fed said. Bernanke said last week that commercial property is the biggest credit issue in the U.S. The default rate for commercial property mortgages held by U.S. banks more than doubled in the fourth quarter and may reach a peak of 5.4 percent at the end of next year, according to Real Capital Analytics Inc. Many companies were unable to raise selling prices, even with higher costs for metals and lumber, the Beige Book said. The Fed’s preferred price index, which excludes food and energy costs, rose 1.4 percent in January from a year earlier, below the long-run range of 1.7 percent to 2 percent policy makers want for total inflation. “Districts generally expected stable prices overall heading forward,” the Fed said. Bernanke told Congress last week that “most indicators suggest that inflation likely will be subdued for some time. Slack in labor and product markets has reduced wage and price pressures in most markets.” To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net .

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U.S. Service Industries Grow at Fastest Pace Since October 2007, ISM Says

March 3, 2010

By Bob Willis March 3 (Bloomberg) — Service industries in the U.S. expanded in February at the fastest pace since October 2007, a sign the recovery is broadening. The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 53 from 50.5 the prior month. The February figure exceeded the median forecast for a gain to 51, according to a Bloomberg News survey of economists. Readings higher than 50 signal growth. The factory rebound that helped the economy emerge from the worst recession since the 1930s is starting to generate improvement in other industries, giving a boost to companies such as Macy’s Inc. The group’s measure of employment rose to the highest level since April 2008, signaling the economy may be on the cusp of creating the job growth necessary to encourage spending. “The strength in the nation’s manufacturing sector is now spreading to the services economy,” Chris Rupkey , chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “With services activity picking up and manufacturing continuing to show strong gains, the economic outlook looks to be self-sustaining. We are probably just months away from seeing broad-based increases in hiring.” The index of non-manufacturing exceeded the highest estimate in the Bloomberg survey of 73 economists. Forecasts ranged from 48.5 to 52.9. Companies cut an estimated 20,000 jobs in February, the smallest drop in two years, after a revised 60,000 reduction a month earlier that was larger than previously estimated, data from ADP Employer Services showed today. The decline in February was the smallest in two years. Fewer Job-Cut Announcements A separate report from the job placement firm Challenger, Gray & Christmas Inc. showed employers in February announced the fewest job cuts in more than three years. Planned firings fell 77 percent in February from a year earlier, the Chicago-based firm said today. The non-manufacturing gauge of business activity, a measure of sentiment, increased to 54.8 in February from 52.2 in January. The index of new orders rose to 55 from 54.7, and a gauge of employment increased to 48.6 from 44.6 the prior month. A measure of prices paid fell to 60.4 from 61.2 and a gauge of backlogs rose to 46 from 45.5. The Labor Department will issue its February employment data on March 5. Job losses may have accelerated last month, partly reflecting the blizzards on the East Coast and winter storms in the South that closed some businesses and prompted temporary shutdowns of government offices, economists forecast. February Payrolls Payrolls fell by 58,000 employees last month after a decline of 20,000 the prior month, according to the survey median. Airlines are among companies cutting staff. Continental Airlines Inc. last month said it will eliminate 600 additional reservation-agent jobs, about 23 percent of its total, as more travelers book their own flights. The lack of jobs may be one reason some merchants are forecasting the improvement in sales this year will pale in comparison to the 2009 drop. Atlanta-based Home Depot, the largest U.S. home-improvement retailer, last month projected comparable-store sales will climb 2.5 percent in 2010 after dropping 6.6 percent last year. Cincinnati-based Macy’s said sales at established stores will grow by as much as 2 percent after slumping 5.3 percent in 2009. ‘Business Feels Better’ “Business feels better, there is no question about it,” Macy’s Chairman and Chief Executive Officer Terry J. Lundgren said on a Feb. 23 conference call. “We still have high unemployment, and I still see tight credit on consumers.” The ISM services survey includes industries like retailing, utilities, health care, housing, transportation and finance and insurance. The measure has lagged behind the group’s manufacturing gauge , which registered a reading of 56.5 in February, the seventh consecutive month of expansion. Factories account for 12 percent of the economy. The world’s largest economy will grow 3 percent this year after contracting 2.4 percent in 2009, according to the median estimate of economists surveyed last month. Consumer spending, which accounts for about 70 percent of the economy, is forecast to climb 2 percent this year. To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

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Toyota Gains as U.S. February Sales Fall Less Than Estimated Amid Recalls

March 2, 2010

By Alan Ohnsman March 3 (Bloomberg) — Toyota Motor Corp. ’s February U.S. sales fell less than analysts had estimated amid congressional scrutiny of the automaker, while Nissan Motor Co. led gains among the biggest Asia-based brands. Toyota sold 8.7 percent fewer vehicles than a year earlier, compared with increases of 29 percent for Nissan, 13 percent for Honda Motor Co. and 11 percent for Hyundai Motor Co. Toyota was expect to drop at least 10 percent by industry data provider Edmunds.com and 27 percent by pricing service TrueCar.com. “I thought Toyota would be off by double digits,” said Jack Nerad , executive market analyst at Kelley Blue Book, an auto pricing and data service in Irvine, California. “It seems to indicate there’s still a lot of residual support for the company.” The second consecutive monthly decline for Toyota, the world’s largest automaker, comes as it works to repair more than 8 million vehicles worldwide to correct defects linked to unintended acceleration. Toyota announced incentives in the U.S. yesterday to win back customers, including no-interest loans and discounted leases on top-selling models. Industrywide sales rose 13 percent in February, led by Ford Motor Co.’s 43 percent surge and a 12 percent increase for General Motors Co. Those gains and an increase of less than 1 percent for Chrysler Group LLC gave U.S.-based automakers a combined 46.6 percent market share for the month, more than the 44.8 percent for Asian competitors, according to Autodata Corp. Toyota Toyota said it sold 100,027 Toyota, Lexus and Scion vehicles last month, down from 109,583 a year earlier. The company on Jan. 26 had suspended sales of eight of its best- selling models, including the Camry sedan, to fix accelerator pedals at risk of sticking because of a flawed component. “The ‘stop-sale’ we had at the beginning of the month and continued coverage by the media on the recalls had an impact,” said Bob Carter , group vice president of the Toyota City, Japan- based company’s U.S. sales unit, in a conference call yesterday. Carter said that Toyota has repaired at least 1 million vehicles and doesn’t see a “major outflow” of its customers to competitors. Toyota is starting incentive campaign this month that is “unprecedented” for the company, after focusing on “taking care of customers” in February, he said. Toyota fell behind Ford and GM in market share last month at 12.8 percent, dropping from 15.9 percent a year earlier, said Woodcliff Lake, New Jersey-based Autodata, a provider of industry statistics. Honda Honda said it raised sales of its namesake and Acura vehicles to 80,671, from 71,575. The increase for Toyota’s closest Japanese rival was aided by a 25 percent jump in sales of midsize Accord cars, traditionally the main competitor to Toyota’s Camry. “Honda was certainly a beneficiary” of Toyota’s problems in February, said Nerad, the Kelley Blue Book analyst. “But so were Ford, GM and Hyundai.” Tokyo-based Honda, the second-largest Japanese automaker, also boosted sales of Civic small cars, Odyssey minivans and Acura MDX sport-utility vehicles. Even with its sales gain, Honda’s market share for the month slipped 0.1 point to 10.3 percent, according to Autodata. Nissan Nissan’s February sales rose to 70,189 Nissan and Infiniti vehicles, from 54,249 a year earlier. The Yokohama, Japan-based company benefited from increases for Cube wagons, Sentra and Versa small cars, Maxima sedans and Frontier pickups, said Al Castignetti , U.S. vice president of Nissan-brand sales. Toyota’s recall is having some effect on the market, Castignetti said in an interview yesterday. “I can’t really quantify the impact on us, but dealers are telling us that what’s happening to Toyota is affecting the entire industry,” he said. “In terms of customers moving from Toyota to Nissan, we’re actually seeing very little of that, though there have been some.” Nissan’s market share grew to 9 percent in February from 7.9 percent a year earlier Autodata said. Hyundai, South Korea’s largest automaker, raised sales to 34,004, from 30,621. The Seoul-based company benefited from a full month of sales of its revamped Tucson SUV and the start of sales of a redesigned Sonata sedan. Kia Motors Corp., a Hyundai affiliate, reported that February sales rose 9 percent 24,052 vehicles. To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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Ford Tops GM in Monthly Auto Sales for First Time Since 1998 Amid 43% Gain

March 2, 2010

By Mike Ramsey and Keith Naughton March 2 (Bloomberg) — General Motors Co. posted a 12 percent increase in U.S. sales in February, trailing analysts’ estimates, as snowstorms curbed showroom traffic across much of the country. Deliveries rose to 141,951 from 127,296 a year earlier, Detroit-based GM said today. The biggest U.S. automaker had an easy comparison from February 2009, when it had the worst results in at least 15 years amid bankruptcy speculation and a deepening of the recession. GM’s total may signal a weakening of the industry ’s rebound from the 2009 slump that sent sales tumbling to the lowest levels in 27 years. Sales volumes faced pressure from record snowfalls blanketing some regions and the Toyota Motor Corp. recalls that temporarily halted sales of some models. “Possibly the entire market could be softer than what people thought,” said Michael Robinet , chief forecaster for CSM Worldwide Inc. in Northville, Michigan. “The weather may have had a deep impact. When you are buried in snow, buying a car is not top of mind.” The seasonally adjusted annual sales rate for cars and light trucks may have reached 10.3 million, the average of 8 estimates compiled by Bloomberg. That would be a fourth straight gain from a year earlier. The February 2009 pace was 9.1 million, the lowest since 1981. Manufacturers, dealers and investors use the annualized rate to compare monthly totals by taking into account seasonal buying patterns. February is typically among the lowest sales months of the year, while June is one of the highest. Annual U.S. sales averaged 16.8 million last decade through 2007. Analysts’ Estimates Analysts expected GM to say deliveries rose 20 percent last month, based on the average of 5 estimates compiled by Bloomberg. The results showed the effect of GM’s plans to sell or shut four U.S. brands — Saab, Hummer, Saturn and Pontiac — as part of its government-backed bankruptcy last year. Deliveries for those four vehicle lines plunged 86 percent to 3,102, GM said. GM said sales for the four brands it is keeping, Chevrolet, Cadillac, Buick and GMC, rose 32 percent from a year earlier. Volumes more than doubled for the Buick LaCrosse sedan and Chevrolet Equinox sport-utility vehicle. Fleet Sales Sales to businesses and government buyers drove GM’s growth. While Chevrolet posted a 32 percent increase, deliveries to dealerships were up only 1 percent, GM said. Chevrolet makes up 70 percent of the company’s U.S. volume. Ford Motor Co. , based in Dearborn, Michigan, may say sales rose 33 percent, while Auburn Hills, Michigan-based Chrysler Group LLC probably will post an 18 percent decline, according to the average estimates. Toyota’s sales may have fallen 10 percent, researcher Edmunds.com projected. Tokyo-based Honda Motor Co. may say deliveries rose 24 percent, while Nissan Motor Co. , based in Yokohama, Japan, may report a 38 percent gain, Edmunds.com said. Seoul-based Hyundai Motor Co. probably will show a 25 percent increase, according to Edmunds.com. A decline for Toyota would be the second in a row for the world’s largest automaker, which recalled about 8 million vehicles for flaws tied to unintended acceleration and suspended U.S. sales of 8 models, including Camry and Corolla sedans, starting Jan. 26. Dealers resumed sales once repairs were made. Toyota Fallout The U.S. troubles for Toyota City, Japan-based Toyota may have cut as many as 400,000 vehicles from the industry sales rate, Himanshu Patel , a JPMorgan Chase & Co. analyst in New York, wrote in a Feb. 24 note to investors. GM began March with its own quality questions, after saying late yesterday that it’s recalling 1.3 million Chevrolet and Pontiac models to fix power-steering systems. GM said U.S. regulators received more than 1,100 consumer complaints about failures. The models include the Chevrolet Cobalt small car. Snow in the eastern U.S. paralyzed car dealers and other businesses last month in cities such as Washington and Philadelphia, while Dallas had its biggest one-day accumulation in a storm that moved across Texas and the South. February economic data may be disrupted by the storms, making it difficult to gauge the extent of the U.S. recovery. The Conference Board’s consumer confidence index fell to the lowest level in 10 months in February, a sign that Americans may limit spending on concern that the job market remains weak. Shake-Up, Opel GM’s January and February gains marked the first time since 2004 that the automaker began the year with sales increases. A shake-up is on the way in GM’s sales operations, with Chief Executive Officer Ed Whitacre is planning the second personnel shuffle since December, three officials familiar with the plan said. Susan Docherty , vice president for sales, service and marketing, is poised to give up the sales and service portion of her portfolio and retain only marketing, said one of the officials, who asked not to be identified because details aren’t public. The moves would extend Whitacre’s push to overhaul GM since the company exited bankruptcy in July. GM said today its funding to reorganize the money-losing Opel unit in Germany will triple to 1.9 billion euros ($2.6 billion) as the automaker tries to persuade European governments to provide loans and guarantees. To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net ; Keith Naughton in Southfield, Michigan, at Knaughton3@bloomberg.net

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GM February U.S. Sales Gain of 12% Trails Estimates as Snow Deters Buyers

March 2, 2010

By Mike Ramsey and Keith Naughton March 2 (Bloomberg) — General Motors Co. posted a 12 percent increase in U.S. sales in February, trailing analysts’ estimates, as snowstorms curbed showroom traffic across much of the country. Deliveries rose to 141,951 from 127,296 a year earlier, Detroit-based GM said today. The biggest U.S. automaker had an easy comparison from February 2009, when it had the worst results in at least 15 years amid bankruptcy speculation and a deepening of the recession. GM’s total may signal a weakening of the auto market ’s rebound from the 2009 slump that sent sales tumbling to the lowest levels in 27 years. Industry volumes faced pressure from record snowfalls blanketing some regions and the Toyota Motor Corp. recalls that temporarily halted sales of some models. “Any bad news in a fragile environment like this will certainly hinder recovery,” said Jesse Toprak , chief forecaster for researcher TrueCar.com in Santa Monica, California. Weather and the recalls “messed up the momentum and trajectory of the industry,” Toprak said. The seasonally adjusted annual sales rate for cars and light trucks may have reached 10.3 million, the average of 8 estimates compiled by Bloomberg. That would be a fourth straight gain from a year earlier. The February 2009 pace was 9.1 million, the lowest since 1981. Manufacturers, dealers and investors use the annualized rate to compare monthly totals by taking into account seasonal buying patterns. February is typically among the lowest sales months of the year, while June is one of the highest. Annual U.S. sales averaged 16.8 million last decade through 2007. Analysts’ Estimates Analysts expected GM to say deliveries rose 20 percent last month, based on the average of 5 estimates compiled by Bloomberg. GM’s results included the four brands that the company is selling or closing: Saab, Hummer, Saturn and Pontiac. Ford Motor Co. , based in Dearborn, Michigan, may say sales rose 33 percent, while Auburn Hills, Michigan-based Chrysler Group LLC probably will post an 18 percent decline, according to the average estimates. Toyota’s sales may have fallen 10 percent, researcher Edmunds.com projected. Tokyo-based Honda Motor Co. may say deliveries rose 24 percent, while Nissan Motor Co. , based in Yokohama, Japan, may report a 38 percent gain, Edmunds.com said. Seoul-based Hyundai Motor Co. probably will show a 25 percent increase, according to Edmunds.com. Toyota’s Troubles A decline for Toyota would be the second in a row for the world’s largest automaker, which recalled about 8 million vehicles for flaws tied to unintended acceleration and suspended U.S. sales of 8 models, including Camry and Corolla sedans, starting Jan. 26. Dealers resumed sales once repairs were made. Increased purchases by business customers probably bolstered U.S. automakers last month, just as they did in January, Himanshu Patel , a JPMorgan Chase & Co. analyst in New York, wrote in a Feb. 24 note to investors. At the same time, the U.S. troubles for Toyota City, Japan- based Toyota may have cut as many as 400,000 vehicles from the industry sales rate, Patel wrote. Snow in the eastern U.S. paralyzed car dealers and other businesses last month in cities such as Washington and Philadelphia, while Dallas had its biggest one-day accumulation in a storm that moved across Texas and the South. February economic data may be disrupted by the storms, making it difficult to gauge the extent of the U.S. recovery. The Conference Board’s consumer confidence index fell to the lowest level in 10 months in February, a sign that Americans may limit spending on concern that the job market remains weak. To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net ; Keith Naughton in Southfield, Michigan, at Knaughton3@bloomberg.net

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Euro Zone’s CPI Estimate Ticks Down in February

March 2, 2010

Euro Zone’s CPI Estimate Ticks Down in February

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Japan auto sales increase in February

March 1, 2010

Japan auto sales increase in February

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Dubai Stocks Climb as U.S. Growth Spurs Oil Price; Emaar, Arabtec Advance

February 28, 2010

By Zahra Hankir Feb. 28 (Bloomberg) — Dubai shares climbed to the highest level in almost a week as oil gained on prospects for increased fuel demand in the U.S. after the economy of the world’s biggest energy-consuming country grew the most in six years. Emaar Properties PJSC , the developer of the world’s tallest skyscraper in Dubai, advanced the most in a month. Arabtec Holding PJSC, the biggest construction company in the United Arab Emirates, rose to the highest in almost two weeks after it agreed with Aabar Investments PJSC to extend the due diligence process. Dubai’s DFM General Index advanced 0.7 percent to 1,592.91, rising for a second day. The measure gained 0.2 percent in February, the first monthly gain since October. Markets are being helped by “resilient oil,” said Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital Ltd. Locally, “market volumes are not that convincing and, from what we could see, there was limited participation from international clients.” About 143 million shares traded in Dubai today, 57 percent below the index’s six-month daily average of 331 million shares, according to Bloomberg data . Crude oil rose 1.9 percent to $79.66 a barrel on Feb. 26 after a report showed the U.S. economy grew at an annual rate of 5.9 percent in the fourth quarter. Oil, which accounts for 75 percent of the revenue of the six monarchies in the Gulf Cooperation Council, advanced 9.3 percent in the month, the biggest gain since May. Prices have more than doubled from their February 2009 low of $34 a barrel. Due Diligence Emaar advanced 3.5 percent to 2.98 dirhams, the most since Jan. 28. Arabtec added 1.4 percent to 2.17 dirhams, the highest since Feb. 17. The company said it approved extending a due diligence process with Abu Dhabi government-owned Aabar to April 16. Aabar said in January it plans to make an offer to buy 70 percent of Arabtec by buying mandatory convertible bonds. Saudi Arabia’s Tadawul All Share Index fell 0.6 percent to 6,437.50. Oman’s MSM30 measure dropped 0.2 percent. Abu Dhabi’s gauge added 0.1 percent and Qatar’s Doha Securities Market 20 Index increased 0.4 percent. Markets in Kuwait and Bahrain were closed for a holiday. To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

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Largest U.S. privately held bank still hasn’t paid back TARP loan

February 28, 2010

Every major financial institution in New York has settled its debt with the Treasury – except Emigrant Savings Bank By Aaron Elstein February 28, 2010, 6:01 AM EST A year after taxpayers bailed out the nation’s financial system, every

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OPEC output soars to new highs in February

February 28, 2010

OPEC output soars to new highs in February

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German inflation falls to 0.3% in February

February 28, 2010

German inflation falls to 0.3% in February

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Employers Probably Cut More Jobs in February Amid Labor Market Struggles

February 27, 2010

By Timothy R. Homan Feb. 28 (Bloomberg) — Companies in the U.S. probably cut more jobs in February and the unemployment rate increased, indicating the labor market in the world’s largest economy is still struggling to rebound, economists said before a government report this week. Payrolls probably fell by 50,000 after declining 20,000 in January, according to the median forecast of 62 economists surveyed by Bloomberg News before the Labor Department’s March 5 report. The unemployment rate may have increased to 9.8 percent from 9.7 percent. Winter storms this month may have contributed to a lower payrolls number, some economists said. A lack of job growth since the economy began expanding again in mid-2009 is making for an uneven recovery from the worst recession since the 1930s. Companies are reducing head count to trim costs, a trend that’s likely to restrain consumer spending in coming months. “Even leaving aside the effects of inclement weather, the economy still appears to be shedding jobs,” said Aaron Smith , a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. “Although businesses have stopped cutting inventories and are beginning to invest more, they have been more hesitant to increase their hiring.” Job growth, and the wage gains that accompany it, are needed to further fuel consumer purchases, which account for about 70 percent of the economy. After the creation of 64,000 jobs in November, the first monthly increase in almost two years, payrolls fell in December and January. The economy has lost 8.4 million jobs since the recession began in December 2007, the most of any downturn in the postwar era. Bernanke on Employment Federal Reserve Chairman Ben S. Bernanke told Congress last week that there were “tentative” signs of stabilization in labor markets, such as fewer job losses and a gain in factory employment last month. “Notwithstanding these positive signs, the job market remains quite weak, with the unemployment rate near 10 percent and job openings scarce,” Bernanke said. The economy is in a “nascent” recovery that he said will require low interest rates. U.S. stocks have declined this year, due in part to signs the economy is struggling to accelerate. The Standard & Poor’s 500 Index and the Dow Jones Industrial Average are both down 1 percent so far this year. The jobless rate probably increased for the first time since October, the survey median showed. The rate is forecast to end the year at 9.5 percent, according to the median estimate of economists surveyed this month. East Coast Snowstorms Snowstorms that crippled portions of the East Coast earlier this month may cause the February payroll numbers to look worse than they otherwise would be, some economists said. The job losses associated with the blizzards may result in a bigger gain in March payrolls, they said. “The weather will certainly play a role,” said Raymond Stone , managing director and an economist at Stone & McCarthy Research Associates in Skillman, New Jersey, who projects payrolls will be reduced by as many as 200,000 because of the storms. His overall forecast is for a decline of 150,000 and he referenced a snow-related payroll drop in January 1996. Factories are at the forefront of the economic recovery, and orders for manufactured goods are forecast to increase in January for a fifth straight month, according to the median estimate of economists surveyed. The 1.8 percent gain in factory orders , projected before a March 4 report from the Commerce Department, would follow a 1 percent rise in December. Manufacturing Growth Manufacturing probably expanded in February for a seventh straight month, economists said before a report from the Institute for Supply Management tomorrow. The Tempe, Arizona- based group’s factory index slowed to 58 from a January reading of 58.4 that was the highest since August 2004, the survey showed. Index readings greater than 50 signal expansion. The U.S. economy expanded in the fourth quarter at a 5.9 percent annual rate, led by business spending on equipment and software, figures from the Commerce Department last week showed. Consumer spending slowed to a 1.7 percent pace, from 2.8 percent during the previous three months. At the start of 2010, Americans probably increased their spending by 0.4 percent, from 0.2 percent in December, economists said before a report tomorrow from the Commerce Department. Incomes probably rose 0.4 percent in January for a second month, the survey showed. Store Closings The pace of spending is causing some companies to reduce payrolls. Sears Holding Corp. , the largest U.S. department-store chain, said this month that it will close 21 underperforming stores in April and May. The closings will affect about 1,000 full-time and part-time workers, Kimberly Freely , a spokeswoman for the Hoffman Estates, Illinois-based company, said in a Feb. 22 telephone interview. Construction also remains a weak spot for the economy. The Commerce Department tomorrow is expected to report construction spending declined in January for the eighth time in nine months, according to the survey median. The projected 0.6 percent drop would follow a 1.2 percent decrease. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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EON Reality Welcomes Prashant Gupta as a New Project Manager in Singapore

February 25, 2010

IRVINE, CA–(Marketwire – February 25, 2010) – EON Reality, Inc., the world’s leading interactive 3D software provider, today announced that Prashant Gupta has joined the EON Reality Singapore office as Project Manager. Prashant will be in charge of technical R&D programs and projects for EON Reality in Singapore as well as play a key role in team collaboration with the EON product line.

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Forex daily technical analysis – February 25

February 25, 2010

Forex daily technical analysis – February 25

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Euro Zone’s confidence halts its advance in February

February 25, 2010

Euro Zone’s confidence halts its advance in February

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Euro Zone’s confidence halts its advance in February

February 25, 2010

Euro Zone’s confidence halts its advance in February

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