Thursday, May 5, 2011

Global Market Weekly Review, 05-05-2011

The U.S. economy grew at a slower pace than forecasted in the first quarter as consumer purchases cooled, home construction fell and government spending declined. GDP rose at a 1.8% annual rate from January through March after a 3.1% pace in the last three months of 2010. Higher gas prices prompted Americans to limit spending after they ramped up purchases in the prior three months. To keep spurring the expansion, Federal Reserve policy makers said they’ll complete their US$600bn round of stimulus through June. The first-quarter pace was the slowest since April through June of last year. For all of 2010, the world’s largest economy expanded 2.9%, the most in five years, after shrinking 2.6% in 2009.

Purchases of new houses in the U.S. rose in March from a record low as the weakest industry in the economy strained to recover. New-home sales, tabulated when contracts are signed, climbed 11.1% to a 300,000 annual pace, faster than forecast. Housing prices fell from a year ago. The market for new homes faces competition from a glut of foreclosed properties that may keep prices depressed
this year, discouraging new construction.

Britain’s economy rebounded in the first quarter by enough to erase the contraction of the previous three months on the strongest surge in service industry growth for four years. GDP rose 0.5% from the final quarter of 2010, when it fell by the same amount. Services expanded by 0.9%, the most since 2006.

Source: ING Funds Berhad

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