Australian inventories –1.2% QoQ

• Inventories in Australia were down seasonally adjusted 1.2% in Q1 2009 compared to Q4 2008 standing at A$119.34 billion.
• Analyst expectations had forecasted a 1.4% quarterly decline following 1.9% fall in Q4 2008.
• Inventories were down 1.1%
• manufacturing sales were down 2.8% on quarter.
• Wholesale trade unchanged.
• Companies’ profits were down –7.2% defying forecasts for a 5% fall after the 6.5% decline in the previous 3 months.

Source: RTT News

Australian Retail Sales +0.3% in April

• Retail sales up 0.3% in April compared to the previous month coming in at $19.35 billion.
• This was slightly below expectations for a +0.5% monthly gain following an increase of +2.2% in March and a fall of 2.0% in February.
• Among the individual components
• Cloth and soft goods retailing +0.8%
• Household good retailing +3.9%
• Other retailing +0.1%
• Food retailing –0.2%
• Department stores –2.8%
• Cafe, restaurants & takeaway –0.5%
• Statewide:
• NSW +1.3%
• Queensland +0.8%
• Tasmania +0.5%
• ACT +0.9%
• Victoria 0.0%
• SA –0.1%
• WA –2.4%
• NT –4.6%

Source: RTT News

Indonesia’s inflation eases, exports drop

• Indonesia’s annual inflation eased to 6.04% MoM in May from 7.31% in April. Economist had expected a rate of 6.2%.
• MoM consumer prices were up 0.04% in May following a decrease of 0.31% in April.
• Exports dropped 22.55% YoY in April.
• MoM exports dropped 1.81% in March.
• Imports fell 2.58% in March MoM.
• Given the fall in inflation and exports, most economists predict Bank of Indonesia to cut its key rate by 25 basis points to 7% on Monetary policy announcements on Wednesday.

Source: RTT News

ISM manufacturing index rose to 42.8

• Pace of contraction in May slowed by more than economists were expecting in May.
• Report showed that the index activity in the manufacturing sector rose 42.8 MoM in May from 40.1 in April.  Slightly better than the 42 consensus.

"While employment and inventories continue to decline at a rapid rate and the sector continued to contract during the month, there are signs of improvement."  - Norbert J. Ore (chair of the ISM Manufacturing Business Survey Committee)

• A turnaround in new orders contributed to the improvement climbing 51.1 in May from 47.2 in April. This marked down the first time the index has been above 50 since November 2007.
• Report also showed a slow down in the pace of contraction in production, with the production index rising 46 in May from 40.4 in April.
• At the same time employment in the manufacturing sector continued to weaken as the employment index dropped to 34.3% in May from 34.4 in April.
• Prices still continued to decline, although at a much slower pace than the previous month.  Prices paid jumped to 34.5 in May from 32.0 in April.
• The fifth straight monthly rise in this measure of U.S. manufacturing followed encouraging signs from China and Europe that the world has moved past the worst the current downturn.

"It was better than expected, and I would put particular emphasis on the new orders component, which broke above 50. In my view, this is more evidence that we're getting closer to the end of the recession.” - Michael Darda (chief economist at MKM Partners LLC, Greenwich, Connecticut)

Source: RTT News, CNBC, Reuters & Barron's

Construction Spending +0.8%

• Construction spending rose +0.8% to an annual rate of $986.7 billion in April followed a 0.4% increase in March.
• YoY construction spending is still down –10.7% compared April 2008.
• Spending for Q1 2009 is down –11.4% compared to Q2 2008.
• A notable increase in spending on private construction spending contributed to the unexpected monthly increase in April, with spending on private construction rising +1.4% to an annual rate of $657.3 billion.
• Spending on residential construction increase by +0.7%,
• Spending on non-residential construction rose +1.8%
• Public construction fell 0.6% in April to an annual rate of $311.4 billion.
• Educational construction dropped by 0.6% in April.
• Highway construction rose +0.9%

Source: RTT News & Barron's

US personal income rose +0.5%

Personal income rose +0.5%, the biggest increase since May last year.

Real Disposable personal income rose 1.1% in April.

The stimulus plan, drove up personal current transfer receipts; it provided an extra payment for the unemployed.  Taxes also fell, as the stimulus included tax credits.

Excluding the stimulus package, real disposable income increased +0.7% in April.

Wages and salaries were unchanged in April, the first time since September that wages didn’t fall.

Small business income increase 0.4% in April, only the second gain in the past 6 months. 

Income from assets fell –0.1%, the seventh straight month decline.

Income from transfer payments rose 2.3%, the sixth straight increase.

“The income data was skewed by the stimulus, where unemployment insurance was accelerated and extended. If you take that out it doesn't look as good as it seems," - Peter Boockvar (equity strategist at Miller Tabak & Co in New York)

Source: Barron's, CNN Money

US consumer spending –0.1%, personal savings +5.7%

US Consumption

• US consumer spending dropped from April to March–0.1% in May after a revised –0.3% in March.  Which was slightly better than expected of of a –0.2%
• Savings jumped to a record annual rate of $620.2 billion.  The savings rate rose 5.7% in April, the highest level since February 1995, from 4.5% in previous months.
• Households buffeted by job losses and falling asset values, are cutting spending on nonessential items, preferring to save an extra income.
• The modest decrease in consumer spending came amid a –0.7% decrease in spending on both durable goods and non-durable goods.
• Spending on services edged up 0.2%
• Real spending on durable goods fell –0.7% in April led by autos.
• Real spending on non-durable goods were down –0.7%

 

US Savings

• With income rising and spending falling, personal savings as a % of disposable personal income was 5.7% in April, compared with 4.5% in March. 
• With the increase in personal savings rate rose to its highest level since February 1995.
• Consumer spending accounts for 70% of US GDP.
• The tax cut in the stimulus plan added $9.8 billion on an annual rate to disposable incomes in April.
• Another provision added $25 a week to unemployment compensation, pumping $11.8 billion annually into incomes.

 

Source: WSJ, Reuters, CNN Money, MarketWatch & Barron's