In the US, there has been a string of generally favourable data releases which have boosted confidence over the growth outlook.
The headline Institute for Supply Management report for the services sector was unexpectedly stronger, rising to 57.1 in December from 55 previously, which will maintain expectations of stronger growth.
The minutes of the Federal Open Market Committee December meeting showed there is greater confidence in the economy, though there needs to be a substantial economic improvement before Fed members consider any adjustmento the quantitative easing programme.
Non-farm payrolls rose by 103,000, lower than the 150,000 increase forecast. But the unemployment rate fell to the lowest level since May 2009 to 9.4% from 9.8% the previous month. This is lower than the 9.7% expected.
In the eurozone, the Purchasing Managers Index (PMI) for the manufacturing sector was revised upwards to 57.1 from an earlier estimate of 56.8. This is also higher than November’s 55.3 level. Meanwhile, the PMI for the services sector was also revised upwards to 54.2 from an earlier reading of 53.7.
The inflation rate rose to 2.2% in December over the same month in 2009, after rising 1.9% in November. Consumer prices exceeded the European Central Bank’s 2% target for the first time in over two years.
Economic growth in the euro region for 2010’s third quarter was revised down to 0.3% from an earlier 0.4% estimate. But the jobless rate in November held at the highest in over 12 years at 10.1%.
In the UK, the PMI for the manufacturing sector was stronger than expected at a 16-year high of 58.3 for December, from a revised 57.5 the previous month. The construction sector PMI fell to 49.1 for December from 51.8 of the previous month. The PMI for the services sector was also sharply weaker than expected with a decline to 49.7 in December from 53 the previous month.
Mortgage approvals for house purchases rose unexpectedly to 48,019 in November, the highest since July, from 47,315 in October. The money supply growth rate fell by a record 1.4% in November compared to the same month in 2009.
This article has been prepared by Bank of Valletta plc for general information purposes only.