Japan’s economy grew 0.6 percent in the first quarter, surpassing previous expectations of 0.4 percent growth. The Japanese economy grew 2.4 percent annually from January to March, which outgrew U.S. annual growth of 0.2 percent.
After a long winter, strong dollar, and sagging oil prices led to a slower start to 2015 than many in the United States had hoped for, things appear to be taking a positive turn. A report by the Commerce Department indicates construction of new homes was higher in April than it had been since 2007. In fact, the jump was the biggest surge in home building in almost 24 years.
A number of leading economists and investment banks in the United States are warning that American GDP growth is likely to disappoint, even after several downward revisions over the last six months.
Two large investment banks urged caution to clients in the last two weeks, citing the likelihood that the Federal Reserve will cut their forecast for GDP growth at their next monthly meeting. The Fed currently has a 2.5% midpoint estimate for annual growth, but economists are warning that actual growth is likely to fall much further.
GDPNow a Canary
Peru’s economy expanded 2.68 percent in March, shattering previous predictions of 2.15 percent. GDP also grew 1.73 percent, which is beyond the government’s estimate of 1.5 percent growth, and the economy increased 0.7 percent on a seasonal level from February to March. Analysts expect Peru to grow around 4.0 percent in 2015.
Every year it seems financial analysts come up with new ways to rank investments. Bloomberg recently added to the list by ranking world economies by the financial “happiness” of the citizens in those nations.
Gas prices are rising in the United States and are expected to rise further, limiting the possibility that Americans will spend more on discretionary goods and services.
In late 2014, many economists expected a rise in discretionary consumer spending and thus higher revenues for the retail sector as cheaper energy costs gave Americans more purchasing power to spend on discretionary goods. Since then, retail sales have consistently disappointed expectations, remaining flat in April. This has left many scratching their heads and rethinking their economic models.
Russia’s economy contracted 1.9 percent in Q1, marking the first economic shrinkage since 2009, but analysts expected a slowdown of 2.6 percent. April’s manufacturing report showed better results than expected, with lower input inflation and higher output.
Venezuela has shown consistently poor economic performance for many years. The communist regime, established by Hugo Chavez (who passed away in 2013) is largely to blame, thanks to its unusual politics and economic strategies. For many years, Chavez attempted to define policy primarily in terms of opposition to the United States, which he termed “Yankee Imperialists.” This led to ongoing economic sanctions over civil rights abuses, but that was only the beginning of the problem.
The United States is beginning to underperform other developed countries as several economic indicators point to a slowdown.
Earlier this week the United States Census Bureau reported retail sales stagnated in April, despite expectations of a 0.2% rise in spending as more employment encouraged greater spending. Instead, consumers are limiting their discretionary spending in a trend that has established itself over the last year.
China’s targeted growth of 7.0 percent for the year may not occur as the economy suffers from weaker consumer spending, sluggish export growth, property decline and a lack of infrastructure projects. The People’s Bank of China cut another interest rate this week, and analysts expect Chinese officials to commence more monetary easing measures and increase spending.
