Three Leading Economies Return Mixed Results

25 November 2002

USA Economy Remains Flat in October
The US Conference Board’s Index of Leading Indicators remained virtually unchanged at 111.4 points in October – confounding the pundits who predicted a 0.1% backslide in the wake of September’s 0.4% decline. The index monitors the direction in which America’s economy is headed over the next three to six months. In 1996, its base year, it stood at 100.
Six of the ten indicators comprising the index rose in October, including building permits and manufacturers' new orders for consumer goods and materials.
Cautious as always, however, the Conference Board is not throwing its fedora in the air. Says economist Ken Goldstein: “Only consumption has consistently fueled the recovery through the first ten months of this year,” adding that the indicators are not as yet “pointing toward a more positive outlook.”
Data sourced from: USA Today, 22-Nov-02

UK Consumers Still Spending
According to the government’s Office for National Statistics, retail sales volumes rose in October by 0.8% compared with September, and by 6% year-on-year. The annual growth rate was the most robust since April and comfortably ahead of analysts’ consensus prediction of a 5% increase.
Commented CIBC World Markets’ Audrey Childe-Freeman: “This really confirms the view that the consumer sector is in good shape. We can rule out a December rate cut at this stage.” The Bank of England has pegged rates at 4% (a forty-year low) for the past year.
Data sourced from: BBC Online Business News (UK), 22-Nov-02

German Q3 Recovery Remains Vulnerable
The German economy remained little better than stagnant during the year’s third quarter, according to Federal Statistics Office data, and the professional seers predict that growth will remain slow through 2003.
But recession fears were downplayed by economists, despite the continued decline in investment by German businesses.
Consumer spending, however, remained robust boosting the economy by 0.3% during the quarter, up from 0.2% during the previous three month period. Stating the obvious with that skill unique to investment bank analysts, Dresdner Kleinwort Wasserstein’s Rainer Guntermann displayed his prescience: “On the whole the data show that growth had not accelerated.”
Data sourced from: BBC Online Business News (UK), 22-Nov-02

Data sourced as stated; additional content by WARC staff