US economic recovery slower than thought

The world's largest economy grew much more slowly than thought in the first half of the year, as business caution, government cuts and some timidity on the part of consumers badly crimped the US recovery.

On top of the shock of a much weaker GDP figure for the three months to the end of June than had been forecast, economists digested a major revision to the first quarter figure.

Economic recovery falters dramatically in first half of year

The economic recovery faltered dramatically in the first half of the year, and that means more trouble ahead.

The latest Commerce Department figures show that the nation's economic output was gasping for breath long before the debilitating debt-ceiling debate took center stage, further dimming prospects for 14 million unemployed Americans.

US economy: GDP growth much weaker than thought

US economic growth is much weaker than first thought, government figures show.

The economy grew at an annualised rate of 1.3% in the second quarter, the Commerce Department said. Economists had forecast growth of 1.8%.

Euro Economic Recovery to Remain Uneven, Irish Central Bank Says

The euro area’s economic recovery will remain gradual and uneven and there are risks to growth from the region’s debt crisis, Ireland’s central bank said.

“The underlying momentum of economic activity in the euro area remains positive and is expected to continue to recover gradually,” the Dublin-based central bank said in its quarterly bulletin today. Growth will probably continue at a “gradual and uneven pace,” it said.

Fed may need to do more if recovery stalls-Williams

The U.S. Federal Reserve's super-easy monetary policy has not been enough to usher in a strong economic recovery, and the central bank may need to do more if growth stalls, a top Fed official said Thursday.

The Fed has kept interest rates near zero for more than two and a half years and has bought $2.3 trillion in long-term securities to further boost the economy after the worst downturn in decades.

Beige Book: Pace of Recovery Slows

The pace of the economic recovery slowed in much of the U.S. in June and early July, according to a Federal Reserve report that also noted that inflation pressures were beginning to ease in many of its regional districts.

The Fed's latest "beige book" showed the soft patch in the economy has continued to spread, with over half of the central bank's 12 districts reporting a slowdown in activity since the previous report.

European shares fall on global recovery worries

LONDON, July 21 (Reuters) - European shares fell on Thursday on global recovery worries after new data showed an unexpected weakening in German private sector growth and a contraction in China's manufacturing industry for the first time in a year, hitting mining stocks.

European shares fall on global recovery worries

LONDON, July 21 (Reuters) - European shares fell on Thursday on global recovery worries after new data showed an unexpected weakening in German private sector growth and a contraction in China's manufacturing industry for the first time in a year, hitting mining stocks.

The market snapped its upward trend after Purchasing Managers Index data showed German manufacturing orders falling for the first time in two years, fuelling investor fears that Europe's largest economy might be losing steam.

Miners, whose growth is dependent on a strong economic outlook featured among the worst performers, after China's factory sector contracted at its fastest pace since March 2009, with the STOXX Europe 600 Basic Resources index down 1.4 percent.

Xstrata , Rio Tinto and Kazakhmys were standout losers, falling 1.6-2.4 percent.

"The German PMI registered a loss of momentum. I do not think it means Europe will go into recession, but growth is slowing," Mike Lenhoff, market strategist at Brewin Dolphin, said.

"We had a poor Chinese PMI figure, rising inflation is squeezing real income growth and it looks like the market is having another wobbly day."

Global economy worries were not the only factor to influence the market, with corporate results proving to be another drag on the index. Ericsson (ERICb.ST), the world's biggest mobile telecommunications network equipment maker, fell 9.6 percent to become the worst performer in the FTSE Eurofirst 300 index after its second-quarter profit came in below expectations.

By 0910 GMT the FTSEurofirst 300 was down 0.5 percent at 1,086.15 points, but support was seen at the 1,066 March low - a number which it had previously bounced from when last tested.

Resistance was seen at 1,132 - a number reached in July after strong U.S. data.

EURO ZONE SUMMIT HOPES

However, the periphery euro zone exchanges were outperforming the rest of Europe on hopes that euro zone leaders will emerge from their emergency summit meeting in Brussels on Thursday with a second bailout deal for Greece.

The details of a preliminary deal reached between France and Germany overnight are expected to be presented at the summit and have not yet been made public.

Spain's IBEX rose 0.7 percent, Portugal's PSI 20 gained 0.5 percent and Greece's Athen's General was up 1 percent, while Germany's DAX fell 0.7 percent.

"France and Germany striking an accord is very good news for the euro zone," Will Hedden, sales trader at IG Index, said. "It will be the peripheral exchanges that will benefit the most.

Banks extended their rebound to feature among the top performers after making their biggest one-day percentage gain since January in the previous session, with the STOXX Europe 600 Banks index gaining 0.8 percent.

The index has lost 23.5 percent since mid-February, when concerns about the euro zone peripheral debt crisis and the global recovery intensified.

There are still concerns the Greek debt crisis could spread to other debt-laden countries like Spain and Italy and analysts said any market gains on Thursday could be short-lived.

"The risk of contagion remains, the Greece problem has not really gone away, just been brushed aside," Hedden said.

by Greg Mahlich

Source: www.reuters.com

BOJ's Yamaguchi says will act decisively, watching yen

MATSUMOTO, Japan, July 20 (Reuters) - The Bank of Japan will
act flexibly and decisively with an eye on how rises in the yen,
among other factors, are affecting the economy, a deputy BOJ
governor said, signalling the bank's readiness to ease monetary
policy further if the country's recovery comes under threat.

Hurdles abound in global recovery

NEW YORK: A dismal US jobs report. A European debt crisis for which there is no quick fix. Slowing growth in China.

There are a number of reasons to be cautious about the prospects for the global economic recovery.

It's against this background that US Federal Reserve Chairman Ben Bernanke will step before Congress for his semi-annual testimony on Wednesday. He will likely be barraged with questions about Friday's jobs report -- a report so across-the-board disappointing that JPMorgan economist Michael Feroli called it "worse than Spinal Tap's 'Shark Sandwich.'"

How bad are economic conditions? Pawn shops, payday lenders are hot

NEW YORK — As the economic recovery sputters, investors looking for a few good stocks may want to follow the money — or rather the TV, the beloved Fender guitar, the baubles from Grandma, the wedding ring.

Profits at pawn shop operator Ezcorp Inc. have jumped by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. And the Wall Street pros who analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.

Economic recovery quietly completes its second year

As far as I know, none of last weekend's fireworks were ignited to celebrate the economic recovery.

If they had been, they probably would have fizzled like a soggy sparkler.

What? You didn't know that this month marks the second anniversary of the U.S. economic recovery? That's understandable, because there really isn't much to celebrate. It's one of the slowest recoveries on record, and it comes after the deepest recession since the 1930s.

Reserve Bank of Australia holds interest rates fire as growth stalls

THE Australian economy is slowing rapidly as inflation moderates and cautious consumers save rather than spend.

As the Reserve Bank yesterday kept interest rates on hold at 4.75 per cent for the seventh consecutive board meeting, governor Glenn Stevens signalled that the bank would lower its forecast for growth in its quarterly monetary policy statement next month, citing subdued household spending, the high Australian dollar and a slower than expected recovery from the summer floods.

Shadow Inventory Halts Economic Recovery

The shadow inventory of homes and other real estate is holding an economic recovery back from fully developing, according to a study by credit firm Equifax. As many as six million residential properties make up the inventory of homes not yet officially foreclosed by lenders, but left in limbo to rot in uncertainty.

Mortgage delinquencies exceed prerecession levels due to lenders’ unwillingness to modify mortgages for the overwhelming majority of applicants. Lender write-offs on home mortgages, which include first mortgages and home equity lines of credit are still climbing and have yet to show signs of peaking, according to the credit research firm.

Bank of Japan Report Signals Recovery

TOKYO—Japan is quickly recovering from the impact of the March 11 earthquake and tsunami, a Bank of Japan report on regional economies showed Monday.

Seven of Japan's nine regions, including the northeast area directly hit by the disaster, upgraded their assessments in the July edition of the quarterly Regional Economic Report from the April edition.

Economic recovery may improve during second half of year

The first half of 2011 might charitably be called a growth recession. Gross domestic product slothed along at 1.8 percent in the first quarter and is expected to do little better in the second. The stock market tried and failed to gain pre-downturn highs. Job creation stalled.

The consensus calls for a somewhat better second half. Oil prices have moderated, Japan is recovering from the earthquake and its effect on the global supply chain. The Greek fuse on a eurozone detonation has been snuffed out, at least for now.

Asian Stocks Gain a Second Week on Greek Debt, U.S. Optimism

Asian stocks rose, driving the region’s benchmark index up for a second straight week and paring a quarterly decline, amid optimism Greece will avoid default, and signs a U.S. economic recovery is strengthening, boosting prospects for Asian exports and bank earnings. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest publicly traded bank, jumped 5.9 percent this week in Tokyo on speculation Greece will avoid a default that might destabilize the region’s banking system. LG Electronics Inc., which gets 30 percent of its revenue in North America, rose 2.8 percent in Seoul. BHP Billiton Ltd. (BHP), the world’s largest mining company and Australia’s No. 1 oil producer, increased 3.4 percent in Sydney as oil and metal prices climbed.

Global economic recovery slips into lower gear as industrial activity dips

The manufacturing boom that has spurred the global recovery of the last 18 months dropped into a lower gear last month as the UK, the eurozone and China registered a significant drop in growth.

Britain's manufacturing sector expanded at the slowest pace in nearly two years while the eurozone, dragged down by Italy and slowing Germany activity, fell from 54.6 points in May to an 18-month low of 52 in June.