Pent-Up Demand Lifts U.S. Economic Recovery Outlook, Business Survey Shows

U.S. companies expect the economy to grow faster than previously estimated as demand from consumers, businesses and other countries picks up, a survey showed.

Gross domestic product in the world’s largest economy will expand at a 3.3 percent pace in 2011, up from the 2.6 percent rate forecast in November, according to a survey by the National Association for Business Economics issued today in Washington. Consumer spending, business investment and exports will also increase more than previously projected.

U.S. economic recovery threatened by events in Midwest, Middle East

Just when the economic recovery seemed to gain momentum, two new threats have emerged that could undermine it. One has flared in the Midwest, the other in the Middle East.

The standoff over benefits for public employees in Wisconsin, pitting Gov. Scott Walker (R) against unions and their Democratic allies, presages battles in many state capitals that could lead to hundreds of thousands of public jobs being cut nationwide. And in Washington, congressional Republicans are demanding steep, immediate budget cuts that economic forecasters estimate would slow the pace of economic growth in 2011.

US Road to Recovery: will Thursday’s data mark the way to recovery?

Has the US entered a sustainable recovery path? The picture is blurry. Recent economic data gave mixed signals about the US economy and investors appear skeptical about their next move. Focus now turns to Thursday's data so as to get a clearer picture about the state of unemployment, the housing market, as well as, the economic activity in the US. Jobless Claims, Durable Goods Orders and New Home Sales are released on Thursday February 24.

EIB lending 'boosts' member state economic recovery

The European Investment Bank's president says the organisation has helped "stimulate" member state recover from the economic downturn.

Speaking in Brussels on Tuesday, Philippe Maystadt said, "We have succeeded in our mission to support recovery in Europe by financing projects that stimulate growth, innovation and jobs and we are proud of our record on climate change projects.

Global recovery boosts Genus

The global economic recovery helped animal breeding business Genus lift revenues and profits in the half year to 31 December.

The firm posted a pre-tax profit of Ј19.1m, up from Ј15.5m over the same period the previous year, on revenues that climbed to Ј153.2m from Ј134.9m.

Harper says budget will reduce deficit, focus on economic recovery

THE PRESIDENT of the European Commission, Jose Manuel Barroso, has shared his belief that Ireland will be able to overcome its current financial problems.

Speaking to an audience of academics at Cambridge University last night, Barroso said he was “fully confident” that the Irish economy would grow to the degree needed to end the country’s crisis.

Nigerian economy on recovery path-IMF

Lagos, Nigeria - The International Monetary Fund (IMF) has hailed Nigeria for the way it weathered the global economic recession and the banking crisis, according to local media reports on Friday. According to IMF, economic growth in the first half of 2010 remained above 7½ per cent and is expected to reach about 8½ per cent for the whole year, on the back of a recovery in oil production and continued strong growth in other sectors.

But IMF said inflation had been stuck in the low double digits for the past two years and foreign reserves have been falling, as the Central Bank of Nigeria (CBN) has focused on maintaining exchange rate stability and low interest rates.

State recovery under way

State Economist Tom Potiow­sky said he’s gained confidence in the Oregon economy but cautioned that the economic recovery that’s under way isn’t going to be fast and easy.

“I think the recovery is here, it’s getting legs, but the key word is patience. It’s going to take some time to climb out of this hole,” he said Thursday at the 17th annual Economic Forecast. The event is a joint project of the Eugene Area Chamber of Commerce, the University of Oregon and The Register-­Guard.

Fed's Evans Says `Disappointing' Recovery Warrants Current Stimulus Steps

Federal Reserve Bank of Chicago President Charles Evans said monetary stimulus is still needed to spur the “disappointing” pace of the economic recovery.

“With unemployment too high and inflation too low -- and both forecasted to stay that way over the next two years -- we have missed on both of our policy objectives,” Evans said in a speech in Rockford, Illinois, today. “There is currently no policy conflict between improving the employment and inflation outcomes. This leads me to conclude that accommodative monetary policy continues to be beneficial for achieving each of these goals.”

IMF: Gradual economic recovery underway in Cyprus

A gradual economic recovery is underway in Cyprus, with growth likely to reach the 1.5 to two per cent range in 2011 and favourable prospects for a continued upturn in 2012, an International Monetary Fund (IMF) team said after a visit from February 9 to 15 2011.

Underlying inflation remains subdued, although higher fuel prices will have an impact on headline inflation, the IMF said.

House prices will fall in 2011, says CEBR

Weaker household earning power will lead to a 1.7% fall in UK house prices in 2011, a research group predicts.

Higher inflation and weaker employment prospects will lead to a fragile economic recovery, the Centre for Economics and Business Research (CEBR) said.

Optimists claim 'clearer vision' on economic recovery

The vast majority of economists see Canada experiencing modest growth this year, including in jobs. But a few are willing to talk up the economy and believe Canadians will have a much better year than most think.

The economic story for this year appears chiselled in stone. Canada is slated for modest growth with no or only minor improvement in the unemployment rate.

S&P Has Made Tremendous Gains: On Its Way To Recovery

The S&P 500 rose 95 percent from its low in March 2009 through yesterday as corporate earnings beat expectations, the Federal Reserve bought Treasuries to stimulate growth and the economy recovered from the worst recession since the Great Depression. U.S. gross domestic product growth quickened to 3.2 percent in the fourth quarter of last year from 2.6 percent in the third, the government reported on Jan. 28.

Geithner: Weak housing, unemployment stifle economic recovery

U.S. Treasury Secretary Timothy Geithner says the nation's economic recovery is still plagued by high unemployment and a weak housing market, but he's confident policy makers will address the nation's current needs by raising the debt ceiling.

Geithner made that assertion while speaking at a forum held by The Atlantic magazine Wednesday morning. His comments closely echo those of Federal Reserve Chairman Ben Bernanke in his testimony before the U.S. House Committee on the Budget Wednesday.

Dollar Falls as China’s Rate Boost Fails to Quell Risk Appetite

The dollar dropped against most of its major counterparts as China’s interest-rate increases failed to quell investors’ appetite for higher-yielding assets.

The euro rose against 13 of its 16 most-traded peers as signs of normality in Egypt’s financial market damped concern that unrest in the region would intensify. New Zealand’s dollar, Brazil’s real and South Africa’s rand, currencies that are tied to global growth, were the top performers. Sterling dropped after the U.K. increased a levy on bank balance sheets.

NLC develops plan for economic recovery

Ahead of the planned del-egates’ conference of the Ni-geria Labour Congress (NLC) scheduled for Abuja from March 1 to 3, the Congress has held an interactive session with the Nigeria Guild of Editors (NGE).

The session, according to the NLC President, Comrade Abdulwaheed Omar, was to intimate the editors on the Congress’ position on this year’s general elections.

Gold Drops as Economic Recovery Curbs Metal’s Investment Demand

Gold declined on speculation that an economic recovery will curb demand for the metal as an alternative investment.

The dollar gained against the euro after a Labor Department report showed the U.S. jobless rate unexpectedly fell to 9 percent in January. Earlier, gold reached a two-week high of $1,361 an ounce as the mounting conflict in the Middle East boosted demand for a haven.

“We’ve seen a slight improvement generally in the economic recovery,” said Bernard Sin, the head of currency and metal trading at MKS Finance SA, a bullion refiner in Geneva. “People are still very concerned about the Middle East and will be comfortable buying on any dips.”

Gold futures for April delivery fell $4.60, or 0.3 percent, to $1,348.40 an ounce at 11:58 a.m. on the Comex in New York. Before today, the price dropped 4.8 percent this year.

An improving labor market “would present a downside risk for metal prices” on the prospect that the Federal Reserve would tighten monetary policy, Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said in a report.

Yesterday, gold held in exchange-traded products rose 0.87 metric ton to 2,028.9 tons, snapping an eight-session slide, data compiled by Bloomberg from 10 providers show. Holdings have dropped 3.3 percent this year. They reached a record 2,114.6 tons in December.

Silver futures for March delivery gained 21.2 cents, or 0.7 percent, to $28.94 an ounce. Earlier, the price reached $29.285, the highest since Jan. 19.

Palladium futures for March delivery fell $2.65, or 0.3 percent, to $817.90 an ounce.

Platinum for April delivery advanced $3.90, or 0.2 percent, to $1,848 an ounce.

Source: http://www.businessweek.com

SA set for economic recovery

Bloemfontein - All is set for economic recovery in 2011, but South Africans should not begin thinking the next growth phase has dawned.

This was the view of Economists.co.za economist Mike Schüssler, the compiler of the Sake24 and BoE Private Clients provincial barometers. These indices are compiled from many data series and measure the economic pulse of five of South Africa's provinces.

Schüssler said that provincial economies in the fourth quarter of last year wiped out much of the third quarter’s backlogs. That, together with positive factors like improved international commodity prices, gave him hope for the first quarter of this year.

It was the coastal provinces in particular that performed in December. The indices show that economic activity in the Eastern Cape was 9.9% up on a year ago. The December activity levels of the Western Cape (8%), Gauteng (5.3%), KwaZulu-Natal (4.8%) and the Free State (3.3%) were also considerably higher than in December 2009.

The coastal provinces, he said, had lower economic stress factors, lower inflation and less indebtedness than that to interior provinces.

In December all the provinces showed increases in their transport sub-indices, with the Eastern Cape (11.8%) performing best. The wheels of the economy were turning again. Road transport was increasing substantially, owing in particular to increased exports to the rest of Africa, said Schüssler.

He also forecasted better global resource prices and increased demand could not only strengthen the mining indices of Gauteng and the Free State, but would also ripple outwards to the transport sectors.

All five provinces' trade indices improved in December. This sub-index measures economic activity at both retailers and wholesalers, as well as leisure and tourism enterprises.

The South African consumer had become stronger over the year, but Schüssler did not believe that consumers would spend much more than they did currently. Levels of indebtedness were still too high.

A sector in which economic recovery was still filtering through slowly was manufacturing. Only the Eastern Cape index (7.5%) indicated a surge while the rest of the country's indices had all improved by less than 2.6% year on year.

The Free State (4%) still had the highest stress index of all the provinces – owing to high indebtedness and unemployment in the province. The lowest level of economic stress (-1%) was seen for the Western Cape.

Source: http://www.fin24.com

UK stocks extend gains as investors back economic recovery

Imperial Tobacco Group and Eurasian Natural Resources Corp (ENRC) both posted gains in trading today (Wednesday), with their strong performances reassuring investors that the UK's economic recovery is on track.

Those involved in online trading saw Imperial Tobacco rise by 4.7 per cent following news that it plans to pay more in dividends as a result of higher sales, Bloomberg reports.

ENRC climbed by 2.6 per cent after revealing that fourth-quarter ferroalloy output increased by 5.6 per cent.

Graham Bishop, an equity strategist at Royal Bank of Scotland Group, said the economic recovery in the US also bolstered the FTSE 100, which advanced by 0.6 per cent to 5,993.72.

"We maintain our view that European equities are the leveraged play on a broadening in global growth. The momentum in the US economy looks consistent with stronger job creation over the coming months," he told the news agency.

Michael Hewson, market analyst at CMC Markets, told Reuters that an improvement in risk appetite since the start of the week has contributed to the positive performance of the FSTE 100.

Source: http://www.onefinancialmarkets.com

Global economic recovery 'beset by tensions and strains' warns IMF chief

The head of the world's main economic watchdog warned politicians today that while the recovery was under way, "it is not the recovery we wanted".

Dominique Strauss-Kahn, managing director of the International Monetary Fund, said the recovery was "beset by tensions and strains which could even sow the seeds of the next crisis".

Speaking in Singapore he argued that allowing emerging markets to grab the lion's share of global growth at a time when developed nations are weighed down by debts would create unsustainable imbalances. He also said growing inequalities in both developed and developing nations could trigger social unrest and undermine future growth.

The hard-hitting speech follows hard on the heels of uprisings in Tunisia and Egypt and the threat of further strikes in Greece and Spain..

Strauss-Kahn, a former French finance minister, said: "Without jobs and income security, there can be no rebound in domestic demand – and ultimately, no sustainable recovery."

IMF officials are visiting Greece this week to broker a deal with the country's left-leaning government after figures showed it was struggling to make cuts in line with an IMF and EU bailout.

The IMF has come under strong criticism for forcing debtor nations in need of bailout funds to sack thousands of public sector workers and impose stiff austerity measures, including higher taxes.

But in a pointed message to countries like Britain, Strauss-Kahn said it was up to individual states to limit their budget deficits, but without widening income inequalities or putting up barriers to growth.

"In the advanced economies, the key is to promote growth and job creation. While structural reforms are essential to make these economies more competitive, these reforms are only likely to pay off over time. So what can be done to improve the short term? The most urgent task is to repair and reform the financial sector, to reduce risk and pave the way for healthy credit growth," he said.

A report yesterday by the National Institute for Economic and Social Research found that more than 90% of the 200,000 jobs created in Britain over the last two years were part-time.

The report said employers were reluctant to commit themselves to full-time staff while the economic outlook remained uncertain.

Strauss-Kahn said: "Looking more closely, we see a worrying development: the pre-crisis pattern of global imbalances is re-emerging. Growth in economies with large external deficits, like the US, is still being driven by domestic demand. And growth in economies with large external surpluses, like China and Germany, is still being powered by exports. As the IMF warned in the years leading up to the crisis – and as the G20 has emphasised – these global imbalances put the sustainability of the recovery at risk.

"The 'global growth gap' is also straining the recovery in other ways. Energy prices are rising swiftly, reflecting rapid growth in the emerging economies. Food prices are rising too – though here supply shocks are the main reason – with potentially devastating consequences for low-income countries. Together, these price increases are beginning to feed into headline inflation. Large and volatile capital flows to emerging economies is another challenging development. They are complicating macroeconomic management and in some cases raising concerns about financial stability."

Source: http://www.guardian.co.uk