Retail sales in the US probably increased last month for a second straight month and factory production fell at a slower pace as the recession abated, economists said before reports this week.
Sales gained 0.4 percent after a 0.5 percent increase in May, according to the median estimate in a Bloomberg News survey before the Commerce Department’s report tomorrow. The next day, Federal Reserve figures may show industrial output fell 0.6 percent last month after a 1.1 percent drop in May.
Consumers are venturing back into stores, seeking discounts and favoring necessities such as food or fuel. Even as the projected increase in sales and reports this week on housing may show the worst of the downturn has passed, a turnaround is likely to be gradual.
“The spending is more on staples than discretionary purchases,” Tom Porcelli, a senior economist at RBC Capital Markets in New York, said last week. “Aggregate demand is still amazingly weak. Things aren’t falling apart, but don’t expect a robust recovery.”
CONSUMER CONFIDENCE
An index consumer confidence dropped last week on concerns about job losses, sending stocks lower. The Standard & Poor’s 500 Index closed at 879.13 in New York on Friday, down 0.4 percent from the previous day, capping its fourth straight weekly loss. The Dow Jones Industrial Average closed down 0.5 percent to 8146.52.
Car dealers struggled last month, as sales dropped to a 9.7 million annual pace from a 9.9 million rate in May, according to data from Woodcliff Lake, New Jersey-based Autodata Corp.
Sales plunged 42 percent from a year earlier at Michigan-based Chrysler Group LLC, and dropped 34 percent at General Motors Corp, also based in Michigan.
The carmakers, two of the three biggest in the US, are restructuring through bankruptcy.
Excluding automobiles, retail sales probably rose 0.5 percent last month, matching the gain in the prior month, the Bloomberg survey said.
FUEL PRICES
The Commerce Department’s report may also show receipts at service stations climbed, in part because of higher fuel prices. Regular unleaded gasoline averaged US$2.64 a gallon at the pump last month, up US$0.35 from the prior month, AAA said.
Oil costs also will be reflected in last month’s price reports due from the Labor Department. An index of producer prices, to be released tomorrow, and a gauge of consumer prices, due the next day, may show bigger gains compared with May, the survey showed.
Excluding food and energy, inflation remains contained, economists said.
Bargain-conscious consumers drove sales gains at chains that sell discounted goods, reports showed last week, including Framingham, Massachusetts-based TJX Cos, owner of TJ Maxx stores, and Pleasanton, California-based Ross Stores Inc, owner of the Ross Dress for Less chain.
The International Council of Shopping Centers, which said retail sales last month fell by 5.1 percent based on 32 chains, predicted this month’s results may show up to a 5 percent drop.
HOUSING, CONSTRUCTION
One area of the economy showing signs of bottoming out is housing.
A Commerce Department report due on Friday may show builders broke ground on houses at a 528,000 annual rate last month, after a 532,000 pace the prior month and compared with a record-low 454,000 in April, the survey median said.
Building permits, which point to future construction, likely rose.
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
The final batch of 28 M1A2T Abrams tanks purchased from the US arrived at Taipei Port last night and were transported to the Armor Training Command in Hsinchu County’s Hukou Township (湖口), completing the military’s multi-year procurement of 108 of the tanks. Starting at 12:10am today, reporters observed more than a dozen civilian flatbed trailers departing from Taipei Port, each carrying an M1A2T tank covered with black waterproof tarps. Escorted by military vehicles, the convoy traveled via the West Coast Expressway to the Armor Training Command, with police implementing traffic control. The army operates about 1,000 tanks, including CM-11 Brave Tiger
China on Wednesday teased in a video an aircraft carrier that could be its fourth, and the first using nuclear power, while making an allusion to Taiwan and vowing to further build up its islands, as it looks to boost maritime power, secure resources and bolster territorial claims. The video, issued on the eve of the 77th founding anniversary of the Chinese People’s Liberation Army Navy, featured fictional officers with names that are homophones of three commissioned aircraft carriers, the Liaoning (遼寧), Shandong (山東) and Fujian (福建). Titled Into the Deep, it showed a 19-year-old named “Hejian” (何劍) joining the group, sparking
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said it expects its 2-nanometer (2nm) chip capacity to grow at a compound annual rate of 70 percent from this year to 2028. The projection comes as five fabs begin volume production of 2-nanometer chips this year — two in Hsinchu and three in Kaohsiung — TSMC senior vice president and deputy cochief operating officer Cliff Hou (侯永清) said at the company’s annual technology symposium in Silicon Valley, California, last week. Output in the first year of 2-nanometer production, which began in the fourth quarter of last year, is expected to
RSS