Chinese consumer confidence in the first quarter hit the highest level since 2007, but people's willingness to spend was slightly reduced by high property prices, said the latest market prospects research report.
Consumer confidence hinges on local job prospects, personal finance and willingness to spend, according to experts at the China Economic Monitoring & Analysis Center affiliated to the National Bureau of Statistics (NBS) and international market researcher Nielsen Co, which jointly released the report on Thursday.
"This significant jump is largely driven by increasing confidence of consumers in central and rural areas, as well as big improvements in consumers' perception of local job markets and personal finances," said Mitch Barns, president of Nielsen Company (Greater China).
Covering more than 3,500 shoppers from cities, towns and villages, researchers reported a marked lift in optimism in Central China provinces, and a narrowing gap between different levels of the cities, and between cities and rural areas in confidence indices.
Pan Jiancheng, deputy director-general of the NBS center, said the fast growth of value-added industries in the central region and the rapid increase of migrant workers' income contributed to their growing consumption confidence.
"Boosting consumption is extremely important to ensure China's economic restructuring will succeed, and raising the consumption of people in the central and western regions is the key," Pan said.
Consumer spending has made major strides since 2008 due to favorable government policies, especially in the auto and home appliance markets.
Of the 2009 GDP growth of 8.7 percent, consumption contributed 4.6 percentage points, investment, 8 points, and net exports, negative 3.9 points.
The contribution of consumption stood at 4 points in 2008, when GDP growth registered 9 percent. Investment contributed 4.2 points and net exports, 0.8 points.
Because of the government's subsidy programs, low-income groups which used to have lower confidence are now closer to the national average, with their confidence up 12 percentage points from the previous quarter, the report said.
Ha Jiming, chief economist of China International Capital Corporation, said better infrastructure in rural areas will largely boost consumption.
Despite rising consumer confidence, people's willingness to spend has decreased. The report showed that 43 percent of consumers think now is a good time to spend, down 3 percentage points from the previous quarter.
"One hypothesis is that consumers are concerned about price increases, especially for real estate. If you are saving to buy a property, and housing prices are increasing faster than income, it logically motivates
people to save more and spend less. Concern over healthcare policies and costs also contribute to this picture," said Barns.
Property prices in 70 major cities rose 11.7 percent in March, the biggest year-on-year rise since July 2005.
"We expect consumer confidence to be stable or rise next quarter, and job prospects will continue to be favorable. The thing to watch is price inflation, especially for high visibility items like housing," said Barns.
The report showed that income is consumers' top concern, unchanged from the previous quarter's finding.
It is followed by health and children's education.
Monday, May 24, 2010
Monday, April 26, 2010
Obama links auto industry woes, financial overhaul
President Barack Obama on Saturday cited encouraging signs of an auto industry rebound as he promoted stronger financial rules that he said would help prevent a repeat of the crisis that pushed carmakers to the brink.
Senate Democrats have set a test vote Monday on legislation to tighten federal oversight of the financial sector.
The auto industry was one of the biggest casualties of a recession fueled by risky lending and speculative trading practices of major financial institutions. But after shedding 400,000 jobs in 2008, bailed-out U.S. automakers are rebounding.
"I knew this wasn't a popular decision, but it was the right thing to do," Obama said of the government's intervention to help automakers.
General Motors Co. said this week it will repay $8.1 billion in U.S. and Canadian government loans five years ahead of schedule. Chrysler LLC, now run by an Italian company, said it boosted its cash reserves by $1.5 billion despite a first-quarter loss of almost $200 million.
In his weekly radio and Internet address, Obama said the auto industry is on more solid footing, but it will take more time for the economy to recover from the loss of 8 million jobs. He blamed the downturn on irresponsible risk-taking by Wall Street companies.
In a speech Thursday in New York, Obama argued for new rules to protect consumers and hold financiers accountable. The changes would end taxpayer bailouts, bring complex financial dealings into the open and extend new rights and protections to consumers and shareholders.
"That's how after two very difficult years we'll not only revive the economy, but help to rebuild it stronger than ever before," he said Saturday.
The White House, in a report timed to GM's loan repayment, said the past nine months had produced the auto industry's strongest job growth in nearly a decade, with the addition of 45,000 jobs.
Senate Majority Leader Harry Reid, D-Nev., has set a test vote on the financial overhaul bill for Monday, but acknowledged that the timetable could slip if bargaining with Republicans proved fruitful. Republicans say they don't agree the bill would end government bailouts and they want to keep negotiating.
Without an agreement with the GOP, Democrats would need 60 votes to move forward in the Senate. They have 59 votes.
In the weekly GOP message, Sen. Kay Bailey Hutchison of Texas said Republicans aren't trying to block the bill but want to make sure it would end bailouts.
"It's time for the name-calling to stop," Hutchison said. "Getting our economy back on track is too important to allow political games to sidetrack these efforts. Both parties agree that any financial regulation should do one essential thing: No company should be considered too big to fail. And never again should taxpayers be expected to bail out those who made risky financial bets with other people's money."
She said "the White House is attacking Republican leaders to score political points." But she said Democrats underestimate the public's understanding of the issues.
Senate Democrats have set a test vote Monday on legislation to tighten federal oversight of the financial sector.
The auto industry was one of the biggest casualties of a recession fueled by risky lending and speculative trading practices of major financial institutions. But after shedding 400,000 jobs in 2008, bailed-out U.S. automakers are rebounding.
"I knew this wasn't a popular decision, but it was the right thing to do," Obama said of the government's intervention to help automakers.
General Motors Co. said this week it will repay $8.1 billion in U.S. and Canadian government loans five years ahead of schedule. Chrysler LLC, now run by an Italian company, said it boosted its cash reserves by $1.5 billion despite a first-quarter loss of almost $200 million.
In his weekly radio and Internet address, Obama said the auto industry is on more solid footing, but it will take more time for the economy to recover from the loss of 8 million jobs. He blamed the downturn on irresponsible risk-taking by Wall Street companies.
In a speech Thursday in New York, Obama argued for new rules to protect consumers and hold financiers accountable. The changes would end taxpayer bailouts, bring complex financial dealings into the open and extend new rights and protections to consumers and shareholders.
"That's how after two very difficult years we'll not only revive the economy, but help to rebuild it stronger than ever before," he said Saturday.
The White House, in a report timed to GM's loan repayment, said the past nine months had produced the auto industry's strongest job growth in nearly a decade, with the addition of 45,000 jobs.
Senate Majority Leader Harry Reid, D-Nev., has set a test vote on the financial overhaul bill for Monday, but acknowledged that the timetable could slip if bargaining with Republicans proved fruitful. Republicans say they don't agree the bill would end government bailouts and they want to keep negotiating.
Without an agreement with the GOP, Democrats would need 60 votes to move forward in the Senate. They have 59 votes.
In the weekly GOP message, Sen. Kay Bailey Hutchison of Texas said Republicans aren't trying to block the bill but want to make sure it would end bailouts.
"It's time for the name-calling to stop," Hutchison said. "Getting our economy back on track is too important to allow political games to sidetrack these efforts. Both parties agree that any financial regulation should do one essential thing: No company should be considered too big to fail. And never again should taxpayers be expected to bail out those who made risky financial bets with other people's money."
She said "the White House is attacking Republican leaders to score political points." But she said Democrats underestimate the public's understanding of the issues.
Tuesday, March 30, 2010
Friday, March 19, 2010
Markets unexcited by debt news
The FTSE 100 remained flat in spite of news that the Government borrowed £12.4bn in February, less than expected. The figure for January was also revised down to £43m from £4.3bn.
The figures still look frightening on most measures, so it wasn’t enough to revise most people’s poor view of the UK. The FTSE dipped 2 points to 5,642. The German Dax and French CAC 40 were also down on the day. The Dow Jones and Nasdaq were marginally up as European markets closed.
Premier Farnell was the day’s strongest riser, gaining 9.84% to 220p as it returned to profit for the full year. The group said sales and underlying operating profit had both returned to year-on-year growth during the fourth quarter. Baker Greggs also reported full year results ahead of expectations
Elsewhere, the markets were supported by bid activity. Oil services group Wellstream Holdings rose 6.8% to 579p as Brazil’s Petrobras and Italy’s Enel were rumoured to be interested in the group. Arriva build on its 17% rise yesterday, gaining another 4.6% to 708p. Germany’s Deutsche Bahn confirmed it had made an approach for the group.
Pulling in the opposite direction was Savills. In spite of robust full-year results, the shares wobbled on news that the group expects the UK residential market to be hit by the General Election in the second half of the year. It also said that its Asia Pacific division was unlikely to see as strong a year.
European insulating and roofing supplier SIG was the day’s biggest faller as it swung to a loss for the full year 2009. Revenues were damaged by a slump in building activity and restructuring costs. The group said that 2010 was likely to be another tough year with revenues not levelling out until the middle of the year.
The banks were a drag on the overall performance of the FTSE 100. Analysts blamed profit-taking as the Royal Bank of Scotland slid 3.6% to 42p, Lloyds fell 3.2% to 55.55p and HSBC slipped 1.7% to 681p.
The figures still look frightening on most measures, so it wasn’t enough to revise most people’s poor view of the UK. The FTSE dipped 2 points to 5,642. The German Dax and French CAC 40 were also down on the day. The Dow Jones and Nasdaq were marginally up as European markets closed.
Premier Farnell was the day’s strongest riser, gaining 9.84% to 220p as it returned to profit for the full year. The group said sales and underlying operating profit had both returned to year-on-year growth during the fourth quarter. Baker Greggs also reported full year results ahead of expectations
Elsewhere, the markets were supported by bid activity. Oil services group Wellstream Holdings rose 6.8% to 579p as Brazil’s Petrobras and Italy’s Enel were rumoured to be interested in the group. Arriva build on its 17% rise yesterday, gaining another 4.6% to 708p. Germany’s Deutsche Bahn confirmed it had made an approach for the group.
Pulling in the opposite direction was Savills. In spite of robust full-year results, the shares wobbled on news that the group expects the UK residential market to be hit by the General Election in the second half of the year. It also said that its Asia Pacific division was unlikely to see as strong a year.
European insulating and roofing supplier SIG was the day’s biggest faller as it swung to a loss for the full year 2009. Revenues were damaged by a slump in building activity and restructuring costs. The group said that 2010 was likely to be another tough year with revenues not levelling out until the middle of the year.
The banks were a drag on the overall performance of the FTSE 100. Analysts blamed profit-taking as the Royal Bank of Scotland slid 3.6% to 42p, Lloyds fell 3.2% to 55.55p and HSBC slipped 1.7% to 681p.
Thursday, March 11, 2010
Senate Poised to Pass Jobless Aid, Tax Breaks
Legislation blending help for the jobless with popular tax breaks for businesses and individuals is slated to pass the Senate Wednesday over protests from conservatives who say it adds too much to the $12.5 trillion national debt.
But compassion for the jobless and the political power of an annual package of tax breaks is
Jonathan D. Colman
--------------------------------------------------------------------------------
likely to produce a bipartisan vote to pass the measure, even though it would add more than $130 billion to the budget deficit over the next year and a half.
The bill would provide unemployment benefits of up to 99 weeks in many states for people mired in joblessness as the economy slowly recovers from the worst recession in decades.
The measure easily cleared a procedural hurdle Tuesday by a 66-34 vote, with eight Republicans voting with Democrats to break a GOP filibuster.
The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats' election-year agenda on jobs _ and threatens to squeeze out other items amid concerns about a budget deficit projected at a record $1.6 trillion this year.
The sweeping bill cleans up a host of unfinished congressional business from last year that languished as the Senate focused on health care.
RELATED LINKS
Current DateTime: 12:18:58 11 Mar 2010
LinksList Documentid: 35794719
States to Cut Jobs as Stimulus Dwindles?US Hiring Outlook Dips: ManpowerThe Ten Best Jobs in America 2010
It would also prevent doctors from absorbing a 21 percent cut in Medicare payments and extends through December a generous 65 percent subsidy of health insurance premiums for the unemployed under the COBRA program, at a cost of $10 billion.
Democrats also hope to finish work this week on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed.
The Senate could clear the measure for President Barack Obama's signature by Friday.
Wednesday's larger bill also provides the annual extension of $26 billion worth of tax breaks for businesses and individuals that are popular with senators in both parties. The $66 billion cost of providing additional months of unemployment checks _ the core benefit is 26 weeks _ is added directly to a budget deficit expected to hit $1.6 trillion this year. Federal cash to help states with Medicaid adds about $25 billion more.
"Even though these programs may be good for your state, a senator has an obligation to stand up and say 'no more,'" said freshman GOP Sen. George Lemieux of Florida. "No more spending our kids' future. No more bankrupting the promise of this country."
But Democrats said it would be heartless to cut off unemployment benefits to the long-term jobless and contended that the benefits inject demand into the economy, helping to lift it.
"This is not just some technical bill," said Sen. Max Baucus, D-Mont. "This bill helps real people. Failure to enact this bill would cause real hardship. Failure to enact this bill would cost jobs."
The tax breaks include a property tax deduction for people who don't itemize, lucrative credits that help businesses finance research and development and a sales tax deduction that mainly helps people in the nine states without income taxes.
But compassion for the jobless and the political power of an annual package of tax breaks is
Jonathan D. Colman
--------------------------------------------------------------------------------
likely to produce a bipartisan vote to pass the measure, even though it would add more than $130 billion to the budget deficit over the next year and a half.
The bill would provide unemployment benefits of up to 99 weeks in many states for people mired in joblessness as the economy slowly recovers from the worst recession in decades.
The measure easily cleared a procedural hurdle Tuesday by a 66-34 vote, with eight Republicans voting with Democrats to break a GOP filibuster.
The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats' election-year agenda on jobs _ and threatens to squeeze out other items amid concerns about a budget deficit projected at a record $1.6 trillion this year.
The sweeping bill cleans up a host of unfinished congressional business from last year that languished as the Senate focused on health care.
RELATED LINKS
Current DateTime: 12:18:58 11 Mar 2010
LinksList Documentid: 35794719
States to Cut Jobs as Stimulus Dwindles?US Hiring Outlook Dips: ManpowerThe Ten Best Jobs in America 2010
It would also prevent doctors from absorbing a 21 percent cut in Medicare payments and extends through December a generous 65 percent subsidy of health insurance premiums for the unemployed under the COBRA program, at a cost of $10 billion.
Democrats also hope to finish work this week on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed.
The Senate could clear the measure for President Barack Obama's signature by Friday.
Wednesday's larger bill also provides the annual extension of $26 billion worth of tax breaks for businesses and individuals that are popular with senators in both parties. The $66 billion cost of providing additional months of unemployment checks _ the core benefit is 26 weeks _ is added directly to a budget deficit expected to hit $1.6 trillion this year. Federal cash to help states with Medicaid adds about $25 billion more.
"Even though these programs may be good for your state, a senator has an obligation to stand up and say 'no more,'" said freshman GOP Sen. George Lemieux of Florida. "No more spending our kids' future. No more bankrupting the promise of this country."
But Democrats said it would be heartless to cut off unemployment benefits to the long-term jobless and contended that the benefits inject demand into the economy, helping to lift it.
"This is not just some technical bill," said Sen. Max Baucus, D-Mont. "This bill helps real people. Failure to enact this bill would cause real hardship. Failure to enact this bill would cost jobs."
The tax breaks include a property tax deduction for people who don't itemize, lucrative credits that help businesses finance research and development and a sales tax deduction that mainly helps people in the nine states without income taxes.
Wednesday, January 13, 2010
NEW YORK (CNNMoney.com) -- There haven't been this many vacant rental apartments for at least 30 years, according to a new industry report.
NEW YORK (CNNMoney.com) -- If you want to refinance your mortgage into a loan with a sub-5% interest rate, better hurry. Your window of opportunity is closing fast.
Lenders are still advertising rock-bottom interest rates, but for most borrowers, rates are rapidly rising into the 5%-plus category.
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During the week of Jan. 7, the average 30-year, fixed-rate loan closed at 5.09%, according to mortgage giant Freddie Mac. That is significantly higher than the 4.71% it averaged at the beginning of the month, and experts say rates will go higher yet.
"Interest rates are up and they're not going to go down below 5% again," said Mark Zandi, chief economist for Moody's Economy.com, not for a while at least.
While homebuyers are still excited about these low mortgage rates, people who already have a loan and want to lower their costs are scrambling to lock in.
Refinancers act when the difference between the rate they're currently paying and the new one is at least a point or two wide, otherwise the costs of going through the refinancing wipes out any savings. In fact as rates rose in December, refinancings plunged, down more than 30%, according to the Mortgage Bankers Association.
A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities.
But the Fed's program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates. The Fed has already been slowing its purchasing, and that has corresponded with the recent rate increases.
As Treasurys go . . .
Not just mortgage rates have turned north. Treasury yields have as well, another indication that mortgage rates are headed skyward.
The yield on the benchmark 10-year Treasury has grown steeply over the past few weeks. It stood at 3.2% at the beginning of December and has soared to 3.84% as of Tuesday, a 20% jump.
Mortgage interest does not track Treasury yields in lockstep, but the two tend to mirror each other's movements.
Mortgage securities rates are always higher than Treasury yields because investors demand a premium above practically risk-free Treasurys.
The difference between mortgage rates and Treasury yields is usually somewhere near 1.7 percentage points, according to Keith Gumbinger of HSH Associated, a publisher of mortgage information. The current spread of about 1.2 percentage points is quite narrow.
That's bound to change, according to David Crowe, chief economist for the National Association of Home Builders. He believes mortgage rates will go up to about 5.5% by late summer. But other factors could push them into a larger-than-expected jump.
Economy bouncing back
For example, as the economy improves (it's hoped), businesses will expand production, hire new workers and open new sales outlets. All that requires borrowing in capital markets and the demand for lending will expand interest rates of all kinds.
A recovering economy also boosts corporate profits, making stocks a better bet for investors.
"Stocks tend to do better when the economy improves," said Stuart Hoffman, chief economist for PNC Financial Services. "Mortgage rates will rise to attract investment."
Hoffman's forecast is for rates to stay quite constant the rest of the winter and then elevate gradually during the spring buying season, the busiest time of year for home sales. He said they should hit about 5.5% by the end of June.
After that, the increases will slow, according to Hoffman, but still approach 6% toward the end of the year. He believes they'll cap at around 5.75% and are not likely to fall back to the 5% level again.
Lenders are still advertising rock-bottom interest rates, but for most borrowers, rates are rapidly rising into the 5%-plus category.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
During the week of Jan. 7, the average 30-year, fixed-rate loan closed at 5.09%, according to mortgage giant Freddie Mac. That is significantly higher than the 4.71% it averaged at the beginning of the month, and experts say rates will go higher yet.
"Interest rates are up and they're not going to go down below 5% again," said Mark Zandi, chief economist for Moody's Economy.com, not for a while at least.
While homebuyers are still excited about these low mortgage rates, people who already have a loan and want to lower their costs are scrambling to lock in.
Refinancers act when the difference between the rate they're currently paying and the new one is at least a point or two wide, otherwise the costs of going through the refinancing wipes out any savings. In fact as rates rose in December, refinancings plunged, down more than 30%, according to the Mortgage Bankers Association.
A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities.
But the Fed's program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates. The Fed has already been slowing its purchasing, and that has corresponded with the recent rate increases.
As Treasurys go . . .
Not just mortgage rates have turned north. Treasury yields have as well, another indication that mortgage rates are headed skyward.
The yield on the benchmark 10-year Treasury has grown steeply over the past few weeks. It stood at 3.2% at the beginning of December and has soared to 3.84% as of Tuesday, a 20% jump.
Mortgage interest does not track Treasury yields in lockstep, but the two tend to mirror each other's movements.
Mortgage securities rates are always higher than Treasury yields because investors demand a premium above practically risk-free Treasurys.
The difference between mortgage rates and Treasury yields is usually somewhere near 1.7 percentage points, according to Keith Gumbinger of HSH Associated, a publisher of mortgage information. The current spread of about 1.2 percentage points is quite narrow.
That's bound to change, according to David Crowe, chief economist for the National Association of Home Builders. He believes mortgage rates will go up to about 5.5% by late summer. But other factors could push them into a larger-than-expected jump.
Economy bouncing back
For example, as the economy improves (it's hoped), businesses will expand production, hire new workers and open new sales outlets. All that requires borrowing in capital markets and the demand for lending will expand interest rates of all kinds.
A recovering economy also boosts corporate profits, making stocks a better bet for investors.
"Stocks tend to do better when the economy improves," said Stuart Hoffman, chief economist for PNC Financial Services. "Mortgage rates will rise to attract investment."
Hoffman's forecast is for rates to stay quite constant the rest of the winter and then elevate gradually during the spring buying season, the busiest time of year for home sales. He said they should hit about 5.5% by the end of June.
After that, the increases will slow, according to Hoffman, but still approach 6% toward the end of the year. He believes they'll cap at around 5.75% and are not likely to fall back to the 5% level again.
Monday, November 30, 2009
As growth surges, should investors bet on India?
As India's economy picks up steam, investors looking for fast growth but wary of lax government policies should take a close look. India could be poised to make headway for years to come.
On Monday, the Indian government reported that the country's GDP expanded at 7.9%year-over-year in the quarter ending in September, a sharp pickup from the 6.1% gain in the prior quarter. The growth easily beat analyst estimates of a 6.3% gain and led to a strong rally on Mumbai's benchmark Sensex index on an otherwise rough day for global markets.
On Monday, the Indian government reported that the country's GDP expanded at 7.9%year-over-year in the quarter ending in September, a sharp pickup from the 6.1% gain in the prior quarter. The growth easily beat analyst estimates of a 6.3% gain and led to a strong rally on Mumbai's benchmark Sensex index on an otherwise rough day for global markets.
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