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Is recovery really real?
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Like George Soros says,the temporary recovery in financial markets will continue a few weeks more.His guess was between 1,5-3 months.My guess is the party just might end in one month after people realize the hidden iceberg of losses in financial sector.Still,we have time to make money.
For this week,Service industries in the U.S. probably contracted for a fourth month and pending home resales fell, signaling the real estate slump and credit crisis continue to depress growth, economists said before reports this week.
The Institute for Supply Management's non-manufacturing index, which makes up almost 90 percent of the economy, dropped to 49.1 in April from 49.6, according to the median estimate of economists in a Bloomberg News survey. A separate report may show fewer Americans signed contracts to buy previously owned homes.
Builders, retailers and financial firms are reeling from the worst real estate recession in a quarter century as property values fall and foreclosures rise. Other figures may show the narrowing trade gap remains a source of strength as exports rise and imports slow.
From my point of view,the economy is not collapsing, it's just weak.My biggest concern is that it could remain weak for a long time.
The Tempe, Arizona-based ISM will issue the service-industry report tomorrow. Readings less than 50 signal contraction. The ISM factory index, reported last week, was unchanged at 48.6 in April as manufacturing shrank for the third consecutive month.
A report from the National Association of Realtors on May 7 may show its index of pending home sales fell 1 percent in March, after a 1.9 percent drop the prior month, according to the survey median. The glut of unsold properties is worsening as buyers wait for prices to slide further.
Pending sales are considered a leading indicator of resales because they track contract signings. Home-purchase figures reflect closings, which typically occur a month or two later.
Builders, which are included in the ISM services index, have been cutting back. Investment in residential construction projects fell at an annual rate of 27 percent in the first quarter, the most since 1981, the Commerce Department reported last week. Declines in homebuilding have subtracted from growth since the first three months of 2006.
The economy grew at a 0.6 percent annual rate in the first quarter, matching the pace in the last three months of 2007. Consumer spending rose at the weakest pace since 2001, hurt by a decline in purchases of long-lasting goods such as cars.
Lower home values, credit restrictions and higher fuel prices continue to depress demand for services, pushing firms to pare expenses. Payroll figures last week showed the economy lost 20,000 jobs in April, while the unemployment rate dropped. Service providers added 90,000 workers, while builders trimmed staff by 61,000, the most since February 2007.
A slowdown in worker efficiency is prompting businesses to limit hiring. Productivity rose at a 1.5 percent annual rate in the first quarter following a 1.9 percent increase from October through December, according to the survey median. The Labor Department will report the figures on May 7.
Strength in overseas markets is lifting exports, preventing American factories from collapsing. The gap between exports and imports shrank to $61.4 billion in March, from $62.3 billion the prior month, according to the Bloomberg survey median ahead of a May 9 report from Commerce. A narrowing of the trade gap added 0.2 percentage point to economic growth in the first quarter.
A bloomberg survey states:
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Release Period Prior Median
Indicator Date Value Forecast
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ISM NonManu Index 5/5 April 49.6 49.1
Productivity QOQ% 5/7 4Q 1.9% 1.5%
Labor Costs QOQ% 5/7 4Q P 2.6% 2.6%
Pending Homes MOM% 5/7 March -1.9% -1.0%
Cons. Credit $ Blns 5/7 March 5.2 6.0
Initial Claims ,000's 5/8 4-May 380 370
Cont. Claims ,000's 5/8 27-Apr 3019 3020
Whlsale Inv. MOM% 5/8 March 1.1% 0.5%
ICSC Chain Store Sales 5/8 April -0.5% 1.4%
Trade Balance $ Blns 5/9 March -62.3 -61.4
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| Tarih
: 5/4/2008 |
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© 2006 Mert TOKER All Rights Reserved. |
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