The world’s largest economic regions reported a slew of economic data on Wednesday—and the news is far from awe-inspiring.
China
Year to date, Chinese industrial production is growing at 6.2 percent
through April, the slowest clip in six years, while fixed asset
investment increased by 12 percent, its lowest rate since the end of 2000.
China: April Industrial Production and Fixed-Asset Investment
Bloomberg
Growth of the M2 money supply unexpectedly moderated in April,
falling nearly 2 percentage points below the government’s 12 percent
growth target. New loans and aggregate financing also came in shy of
estimates.
China: M2 Money Supply, April 2015
The growth in annual retail sales moderated but continues to rise at a
double-digit pace, though this, too, missed economists’ forecasts.
China's economy is attempting to make a transition to growth led by
domestic demand, rather than credit-fueled infrastructure investment.
China: Retail Sales, April 2015
Bloomberg
These prints signal that the People’s Bank of China might have to provide additional monetary stimulus if policy makers are committed to achieving their growth target.
Europe
As a whole, the euro-zone economy grew by 0.4 percent in the first three months of 2015, in line with expectations.
Euro Zone: Quarterly GDP Growth
The handoff to the second quarter looks to be weaker than
anticipated, however, with industrial production dropping by 0.3 percent
month-over-month in March.
Euro Zone: Industrial Production, March 2015
Bloomberg
Meanwhile, Greece is once again mired in recession,
with gross domestic product falling by 0.2 percent in the first quarter
on the heels of a contraction of 0.4 percent in the final three months
of 2014.
Greece: GDP Q1 2015
Bloomberg
Germany was another fly in the ointment, with growth of 0.3 percent
coming in 0.2 percentage points below the consensus estimate. Among the
biggest European economies, France was the surprising standout,
recording growth of 0.6 percent.
Germany and France: Q1 GDP growth 2015
Bloomberg
United Kingdom
Signs of wage acceleration sent the British pound to its highest
level relative to the U.S. dollar this year. Average weekly earnings for
the three-month period ending in March rose by 1.9 percent, compared to
the same period a year ago, surpassing economists' expectations.
U.K.: Average Weekly Earnings, Q1 2015
Bloomberg
Bank of England Governor Mark Carney, however, derailed the pound's rally soon thereafter. The central bank trimmed its growth outlook
for the next three years in its quarterly inflation report. Carney also
indicated that inflation, which is currently running at zero, will
return to its 2 percent target in two years.
U.K.: Inflation, March 2015
Bloomberg
United States
Months of savings at the pump have yet to provide a meaningful boost to more discretionary U.S. consumer spending, with retail sales flatlining
in April. Core retail sales, which exclude automobiles and gasoline,
rose by just 0.2 percent. Upward revisions to March’s print took some of
the sting out of an otherwise disappointing report.
U.S.: Retail and Core Retail Sales, April 2015
Bloomberg
American consumer spending will need to post a better showing in
upcoming readings for a robust snap-back in economic growth to
materialize in the second quarter.
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