U.S. second-quarter GDP revised up, fastest in over two years
The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years, and there are signs that the momentum was sustained at the start of the third quarter. Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment. Growth last quarter was the strongest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that second-quarter GDP growth would be raised to a 2.7 percent rate. Retail sales and business spending data so far suggest the economy maintained its stamina early in the third quarter. Other data on Wednesday showed private employers ramped up hiring in August, adding 237,000 jobs to their payrolls. That was up from 201,000 jobs in July. The ADP National Employment Report was released ahead of the government’s more comprehensive employment report on Friday, which is expected to show solid job gains in August and diminishing labour market slack. The dollar extended gains versus a basket of currencies on the data, while prices for U.S. Treasuries fell. U.S. stock index futures trimmed gains.
German inflation picks up more than expected, still below ECB target
German consumer inflation accelerated more than expected in August but remained below the European Central Bank’s target, data showed on Wednesday, suggesting a solid upswing in Europe’s largest economy is slowly pushing up price pressures. Consumer prices, harmonised to compare with other European countries (HICP), rose by 1.8 percent on the year after an inflation rate of 1.5 percent in the previous month, the Federal Statistics Office said. On the month, prices rose 0.2 percent. Both figures came in stronger than expected, with a Reuters poll having pointed to an increase of 1.7 percent on the year and a rise of 0.1 percent on the month. A breakdown of non-harmonised data showed energy and food costs were the main drivers of inflation while the cost of services did not rise as strongly as in July.
China can meet 2017 growth target, may struggle on investment: planning head
China can meet its 2017 economic growth targets but may struggle to meet its investment and foreign investment goals, the country’s state planning head told parliament on Tuesday, according to the official Xinhua News Agency. Xinhua cited He Lifeng, head of the National Development and Reform Commission, as saying external factors including rising protectionism, changes in financial policy in major economies and geopolitical instabilities may have a negative impact on the country. He also said risks from insufficient domestic growth drivers and rising corporate costs cannot be ignored. China’s economy grew a faster-than-expected 6.9 percent in the first half, putting it on course comfortably to meet its 2017 growth target and giving policymakers room to tackle big economic challenges ahead of important leadership changes later this year. “China is able to achieve targets in economic growth, employment, inflation, fiscal revenue and trade for the second half,” He was quoted as saying. China will also step up financial coordination to fend off risks in the country’s “chaotic” financial markets while striving to stabilize the property market, where prices soared last year, He said.