World Economy Indicators

29 July 2003

• Latest Commerce Department figures provide fresh grounds for optimism about the US economy.

New orders for durable goods (those designed to last more than three years) rose by 2.1% last month, the biggest gain since January. It was a particularly good month for the machinery sector, where orders rose 4.4%, and the car industry, up 2.2%.

A separate report on home-buying also bodes well. June sales of new, single-family houses jumped 4.7%, reaching an annualised pace of 1.16 million. Analysts had been predicting a fall.

• Across the Atlantic there were more mixed signals, as second-quarter UK economic growth picked up but not by enough to meet government forecasts.

According to preliminary figures from the Office for National Statistics, British GDP rose 0.3% compared with Q1 and 1.8% year-on-year. First-quarter growth was just 0.1% on the previous three months.

The second quarter was particularly strong for the service sector – up 0.4% on Q1 and 2.6% year-on-year. However, total growth remains below full-year forecasts of 2%–2.5% made in April by Chancellor of the Exchequer Gordon Brown.

• In Germany, meanwhile, consumer prices this month rose 0.2% from June and 0.9% compared with July 2002.

The preliminary findings from the Federal Statistics Office are slightly below analysts’ expectations. The rise is thought to reflect high oil prices and an increase in the cost of package-holiday tours.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff