Here's my summary of the key news overnight in 90 seconds at 9 am, including some relatively positive news.
American job growth picked up in April, with employers adding 165,000 jobs, and the unemployment rate ticked down again, to 7.5%. The participation rate was unchanged. This latest data suggests steady but not spectacular economic growth in the US economy. The two previous months had their job growth data revised up substantially as well.
At the same time, investment by American business has been growing strongly.
The news pushed the Dow sharply higher to over 15,000 and the S&P made similar gains into record territory.
Interest rate markets are signalling something similar with US credit default swap spreads hitting their lowest levels since late 2007.
Meanwhile, France has signalled over the weekend that 'austerity is over' for it and for the EU generally and there will be much less commitment to getting EU deficits and debt levels under control.
India has cut interest rates for the third time this year in an attempt to revive growth in its sluggish economy.
But the IMF says growth in Asia is set to pick up this year driven largely by continued strong domestic demand. It predicts growth will reach almost 6% in 2013. It also sees favourable labour market conditions - unemployment is at multiyear lows in several economies - and relatively easy financial conditions.
The RBA has another rate decision tomorrow and it is shaping up to be one of the hardest to pick this year. Most economists however think they will not cut.
And Rio Tinto, majority owner of the Bluff smelter, has told analysts that it needs to cut costs in a number of areas including its aluminium business.
The Kiwi dollar starts the week at 85.3 USc, 82.7 AUc, and our TWI now stands at 78.6.
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5 Comments
ah yes- debt is soooooooo inconvenient. Growth is what we need. Let's ignore the debt, and push on.
Any idea, SK, what that debt might represent, perchance?
Work that out, and you might then understand what will happen when an increase in real activity is attempted.
SK, you are absolutely wrong. At the Fedral level, yes Congress hasnt really done much in the way of austerity measures because they have been blocked. That doesnt matter the money gets spent or not at state level and not at the Fed level.
http://krugman.blogs.nytimes.com/2013/04/27/american-austerity-an-updat…
"So this is actually a picture of very bad policy."
In terms of the US is out of the woods, uh there is very little evidence that is the case...
Take the US inflation rate, still dropping,
http://krugman.blogs.nytimes.com/2013/04/29/inflation-nation-not/
Or US food stamps as a % of GDP (graph 2)
http://krugman.blogs.nytimes.com/2013/05/05/naive-fiscal-cynicism/
regards
MoM is much, much less convinced by the 'jobs' data, and she's an analyst with long-term series and sound local knowledge to work with....not a MSM cheer-leader.
So, therefore, it follows that hers and similar analyses can be immediately written off......
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