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World Stocks Fall on Weak US Jobs Data

Japan’s Nikkei stock index was a notable standout, hitting a four-year high when it closed earlier as investors cheered the central bank’s new policies.

In other regions, attention was focused on the U.S. data, which showed an increase of only 88,000 jobs in March, far below the expected rise of about 195,000. Although the unemployment rate fell to 7.6 percent from 7.7 percent, that was only because more people gave up looking for work.

Analysts said the figures showed the U.S. recovery, which had been advancing at a good pace in recent months, would be uneven. They suggested it would be only a temporary slowdown, however.

“We don’t anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the US is still unable to sustain what used to be just average rates of growth,” said Paul Ashworth, chief U.S. economist at Capital Economics.

Britain’s FTSE 100 ended Friday 1.41 percent lower at to 6,254 while Germany’s DAX dropped 2 percent to 7,658. France’s CAC 40 index lost 1.7 percent to 3,663.

The jobs data sent Wall Street lower, with the Dow shedding 0.75 percent to 14,497 and the broader SP 500 down by 0.9 percent to 1,546.

Earlier, the attention in markets had been on Japan, where the Nikkei surged for a second straight day after the central bank’s new governor, Haruhiko Kuroda, unveiled plans to pump huge amounts of money into the financial system to spur price rises, spending and borrowing in an economy that has stagnated for years.

The central bank said it wanted to double the money supply and achieve a 2 percent inflation target within about two years. Kuroda described the scale of monetary stimulus as “large beyond reason,” but said the inflation target would remain out of reach if the central bank stuck to incremental steps.

“The size of monetary easing announced yesterday far exceeded expectations,” said analysts at DBS Bank Ltd. in Singapore in a commentary.

The Nikkei 225 in Tokyo closed 1.6 percent higher at 12,833.64, its highest finish since Sept. 1, 2008. Earlier in the day it surged more than 3 percent, breaking the 13,000 level.

Stock markets in Asia outside of Japan sagged, however.

Hong Kong’s Hang Seng tumbled 2.7 percent to 21,726.90. Analysts said the fall reflected some nervousness about a recent outbreak of deadly bird flu in China. Six people have died and authorities have ordered the slaughter of all poultry at a Shanghai market where the virus was detected. The news hurt tourism and travel-related shares. Hong Kong-listed Air China plunged 9.8 percent and China Southern Airlines sank 8.5 percent.

South Korea’s Kospi dropped 1.6 percent to 1,927.23, dragged down by political jitters over the latest tensions with Pyongyang. Australia’s SP/ASX 200 lost 0.5 percent to 4,891.40 as investors took profits after recent rallies

In Japan, the monetary easing measures pushed the yen sharply lower. On Friday, the dollar was up to 97.09 yen from 96.13 yen late Thursday.

Mark Williams, chief Asia economist at Capital Economics, said that the Bank of Japan’s credibility rests on the success of the new direction the bank is taking.

“Markets are giving it the benefit of the doubt for now. But if the broad monetary aggregates and inflation don’t show signs of a shift, the new-found trust in the capacities of the BoJ will rapidly fade,” Williams said in a written commentary.

Benchmark oil for May delivery was down 67 cents to $92.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.19 on Thursday.

The euro rose against the dollar, to $1.3017 from $1.2939 late Thursday in New York.

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AP Business Writer Pamela Sampson contributed from Bangkok

Article source: http://www.nytimes.com/aponline/2013/04/05/world/asia/ap-world-markets.html?partner=rss&emc=rss

Growth in Consumer Spending Slows

WASHINGTON — American consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years, the Commerce Department said Thursday. Income surged because companies rushed to pay dividends and bonuses before tax increases.

The 0.2 percent rise in consumer spending last month was slightly slower than the 0.4 percent increase in November.

Income jumped 2.6 percent in December from November, the biggest gain since December 2004.

Economists expect consumer spending, which accounts for about 70 percent of economic activity, to slow this year. That’s because consumers are receiving less take-home pay starting this month.

Congress and the White House reached a deal on Jan. 1 to prevent income taxes from rising on all but the wealthiest Americans. But they allowed a temporary reduction in Social Security taxes to expire this year. That means a person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

The diminished pay could slow consumer spending and economic growth at a precarious moment.

The economy unexpectedly shrank in the October-December period at an annual rate of 0.1 percent, the government said Wednesday. The dip was a reminder of the economy’s vulnerability as automatic cuts in government spending loom.

Some analysts have estimated that the roughly $120 billion in higher Social Security taxes could subtract up to 0.7 percentage point from growth this year.

Separately, the Labor Department reported Thursday that the number of Americans seeking unemployment aid rose sharply last week but remained at a level consistent with moderate hiring.

Weekly applications for unemployment benefits leapt 38,000 to a seasonally adjusted 368,000, the government said. The increase comes after applications plummeted in the previous two weeks to five-year lows.

The volatility reflects the government’s difficulty adjusting the data to account for layoffs after the holiday shopping season. Job cuts typically increase in the second week in January as retailers dismiss temporary employees hired for the winter holidays. Layoffs then fall in the second half of the month.

The department attempts to adjust for such fluctuations but the January figures can still be volatile. The four-week average, a less volatile measure, ticked up to 352,000, just above a four-year low.

On Friday, the government is scheduled to issue its January jobs report. Analysts forecast that it will show employers added 155,000 jobs, the same as in December. The unemployment rate is expected to remain at 7.8 percent for the third straight month.

Article source: http://www.nytimes.com/2013/02/01/business/growth-in-consumer-spending-slows.html?partner=rss&emc=rss

World Stocks Fall on Weak US Jobs Data

Growth in Consumer Spending Slows

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