Macroeconomic News

08.09.2007 14:24 Russia`s trade surplus drops 17.5% in January-July 2007 to $82.5 billion Russia`s trade surplus dropped 17.5 percent to $82.5 billion in January-July 2007 compared to the same period a year earlier, the Federal Custom Service (FCS) reported. According to the FCS, the foreign trade turnover increased 20.9%, to $286.7 billion in the reporting period. Exports amounted to $184.6 billion in January-July 2007, an increase of 9.5 percent from the same period of 2006. Imports totaled $102.1 billion, up 48.8 percent in the reporting period compared to the first seven months of 2006. Andrei Klepach, head of the ministry`s planning department, said the country would see its enormous current account surplus disappear in 2009, or even earlier, due to rapidly rising imports. 04.09.2007 23:11 US August ISM manufacturing index 52.9% vs 53.8% in July The nation`s manufacturers cut back production in August, the Institute for Supply Management reported Tuesday. The ISM index fell to 52.9 in August from 53.8 in July. The decline was about in line with expectations. The consensus forecast of estimates collected by Marketwatch was for the index to slip to 53.0. Many economists were worried that there could have been a steeper decline because of the recent financial market turmoil. Readings above 50 indicate expansion, while readings below indicate contraction.

New orders fell to 55.3 in August from 57.5 in July. The employment index rose to 51.3% from 50.2. The price index fell to 63.0 from 65.0. Markets largely ignored the report, which came in close to expectations for 53. "The Fed`s focus is more on market conditions and the ISM is neither strong enough (nor weak enough) to shift attention away from the markets," wrote Stephen Gallagher, U. S. economist for Societe Generale. 01.09.2007 15:09 US economy advanced by 4,0% in the second quarter The U. S. economy grew at an annual rate of 4 percent in the second quarter of 2007, the fastest pace since the first quarter of 2006, the Commerce Department reported. The growth in the gross domestic product (GDP), the output of goods and services produced by labor and property located in the Untied States, was stronger than the 3.4-percent rate previously estimated and followed a 0.6-percent increase in the first three months.

The acceleration in GDP growth in the second quarter primarily reflected an improving trade deficit, with stronger export sales and fewer imports. In the second quarter, U. S. exports of goods and services rose by 7.6 percent, compared with an increase of 1.1 percent in the first. Imports of goods and services fell 3.2 percent, in contrast to an advance of 3.9 percent in the first. Business investment, in the form of restocking of inventories, and construction of shopping centers, office buildings and other nonresidential projects was also stronger than previously estimated. Consumer spending, which accounts for two-thirds of overall economic activity, was up 1.4 percent, much slower than the 3.7-percent pace in the first quarter.

Residential fixed investment dropped 11.6 percent in the second quarter. That marked the sixth consecutive quarterly decline in this field but the drop was not as steep as the 16.3-percent decrease in the first quarter. 31.08.2007 21:33 Japan`s industrial production posts 0.4% drop for July Japan`s Industrial production for July decreased 0.4 percent from June, the first decrease reported in two months. The Japanese Ministry of Economy, Trade and Industry reported the rate was 3.2 percent higher than the previous year. The results showed a better industrial performance than analysts` predictions of 0.5 percent. The Ministry identified the industry sectors mainly responsible for the decline as transport equipment, chemicals (excluding drugs) and fabricated metals. Commodities mainly contributing to the decrease included large passenger cars, small passenger cars and midget passenger cars. The Ministry also projected an increase of 6.8 percent in August and a decrease of 2.5 percent for September.

Japan`s unemployment rate dropped to 3.6 percent in July from 3.7 percent in June. Core consumer prices, which exclude fresh food, fell 0.1 percent from a year earlier, the statistics bureau said. 28.08.2007 21:44 Russia`s GDP grew 7.9 percent year-on-year in the first seven months of 2007 According to the Russian Economy Ministry, in the first seven months of 2007, GDP grew 7.9 percent year-on-year, compared with a 6.1 percent growth a year earlier, the ministry`s survey of Russia`s current economic situation revealed. Monthly GDP growth is reported to have remained stable at 0.7-0.8 percent on average between January and July, net of seasonal factors. In July alone, GDP increased 8 percent compared with July 2006. The survey connects the high economic development rates to improvements in investment demand, construction, and manufacturing, as well as a high consumer demand, to which imports are catering an increasing share, amid a slowdown in exports growth. Russia`s Finance Minister Alexei Kudrin said earlier that he expected Russia`s GDP to reach 7.1 percent in 2007, while Economy Minister German Gref stated that the ministry was planning to revise its GDP forecast up from 6.5 to 7 percent. In the first half of 2007, GDP grew 7.8 percent. 27.08.2007 21:08 U. S. new home sales rise 2.8 percent in July of 2007 The U. S. Commerce Department reported Friday a 2.8 percent increase of new-home sales in July, compared to the previous month, but a 10.2 percent decrease over July 2006.

That`s 870,000 units sold across the country. However, the median length of time completed homes were on the market was 6.1 months in July, compared to 5.9 months in May. Inventory of new homes in July dropped to 533,000 units, or a 7.5-month supply. That`s down from June`s supply of 7.7 months. Completed homes represented 33 percent of the inventory and those still under construction represented 51 percent of the inventory. Units for sale, but not yet started, were 16 percent of the inventory. Regionally, the West and the South both saw new home sales on the positive side for the month - 22.4 percent in the West and 0.6 in the South.

The Northeast had a decrease of 24.3 percent for the month and the Midwest had a 0.9 percent decline. 22.08.2007 22:34 Russia`s GDP grew 8.0 percent in July and 7.9 percent in January-July 2007 Russia`s GDP grew 8.0 percent in July and 7.9 percent in January-July 2007, Russian Economy Minister German Gref told during a meeting with President Vladimir Putin. Gref also believes that Russia`s annual inflation will remain within the forecast of 8 percent. The Minister added that inflation stood at 6.6 percent in January-July 2007. The real disposable cash incomes (net of obligatory payments and adjusted against the consumer price index) of Russians increased by 15.5 percent in July 2007 compared to the same month a year earlier, the Russian Federal State Statistics Service (Rosstat) reported.

Meanwhile, this figure is 1.3 percent greater than that of June 2007. Real disposable cash incomes stepped up 11.9 percent in January-July 2007 compared to the first seven months of 2006. According to Rossat`s preliminary data, the average accrued wages rose 25.4 percent to RUR13,575 (approx. USD527) in July 2007 compared to July 2006 and 1 percent less than in June 2007. Fixed investment in Russia grew 24.7 percent to RUR531.4bn (approx. USD20.645bn) in July 2007 compared to the same period a year earlier, according to the Russian Federal State Statistics Service`s (Rosstat) data. Fixed investment rose 22.7 percent between January and July compared to the first six months of 2006. 20.08.2007 22:33 US industrial production up 0.3 pct in July, capacity utilisation 81.9 pct US industrial production rose 0.3 pct in July, the Federal Reserve reported, as factory and mining output offset a cool-weather drop at utilities. July`s 0.3 pct increase wasn`t far out of line with analyst expectations of a 0.2 pct increase.

June production was revised up a tenth of a point to +0.6 pct. The 81.9 pct capacity use was also in line with the 81.8 pct expectation and followed an 81.8 pct rate in June, also revised up a tenth. Utility output fell 2.1 pct as unusually cool July weather reduced the electricity demand. Manufacturing was up 0.6 pct, including a sharp 2.6 pct jump in the auto industry. Business equipment rose 0.9 pct overall, but machinery at +1.1 pct and computers and electronics at +1.0 pct, did somewhat better. Construction fell 0.1 pct as commercial building appears to be compensating to a degree for the housing slump. Mining output rose 0.7 pct last month. Year-on-year, US industrial output was up 1.4 pct in July. 17.08.2007 00:24 Eurozone economy slows down in the second quarter The eurozone economy slowed down in the second quarter of this year, compared to the first quarter, the European Union`s statistics bureau Eurostat estimated on Tuesday.

During the second quarter, the gross domestic product (GDP) grew by 0.3 percent quarter on quarter in the 13-nation bloc sharing the same currency euro, slowing down from 0.7 percent in the first quarter. GDP growth dropped more sharply than expected in Germany and France, the two largest economies in the euro zone, with both slowing down from 0.5 percent to 0.3 percent. Compared to a year ago, seasonally adjusted GDP grew by 2.5 percent in the euro zone, after 3.1 percent in the previous quarter. Economists said the economic slowdown may persuade the European Central Bank to have a second thought on its plan to raise the eurozone benchmark interest rate in September, while others expected the eurozone economy to gather strength in the second half of this year. In the 27-nation EU, GDP growth also slowed to 0.5 percent quarter on quarter in the second quarter from 0.7 percent in the first quarter. 14.08.2007 00:11 Russia generated trading surplus of $70.7 billion in the first half of 2007 Russia generated trading surplus of $70.7 billion in the first half of this year, 15.4 percent down on year, the Federal Custom Service of Russian Federation (FCS) reported. The January-June exports of Russia surged 8.6 percent on year to $155.3 billion, while the imports stepped up 48.7 percent to $84.6 billion.

So, the foreign turnover amounted to $239.9 billion, according to the FCS. But Russia`s Economic Development and Trade Ministry reported a bit different figures not long ago. According to the ministry, the H1 exports stood at $160.5 billion, having stepped up 11.6 percent on year. The growth was 31.1 percent in the first half of 2006. The ministry blamed some slowdown on lower prices for crude oil exports and some decline in exported quantity of vital goods. Under the ministry`s calculation, H1 imports of Russia amounted to $96.7 billion, 38.5 percent up on year (vs. the acceleration of 26.6 percent generated from January to June of 2006). The growth in rates, the ministry explained, could be attributed to more aggressive demand of the population coupled with improved investment activity.