Yesterday, the WSJ noted a general slow down in economic data. Today, we seee Oil easing off its highs, CPI declining, housing starts strong, as Home Depot made good noise (on top of Lowes positive sounds yesterday).
Industrial production rose 0.4%, higher than expected. Even more importantly, July industrial capacity was up to 77.1% — a 3 year high. DJ Newswires reported that “semiconductor production rose 2.7% in July, matching a 2.7% gain in June, and output of computers and office equipment rose 1.9% last month after a 1.6% rise the month before.”
Here’s an excerpt from yesterday’s WSJ:
An economic slowdown is spreading around the world as record oil prices, falling stocks and weak technology spending ripple from South Korea and Japan to the U.S. and Germany, casting doubt on a global recovery taken for granted just a few months ago.
Global weaknesses are an added worry for the U.S. because a three-year spending spree by American consumers is winding down, and economists had been counting on higher exports to help keep the U.S. expansion on track in the coming year.
The U.S. Commerce Department reported Friday that the U.S. trade deficit widened to a record $55.82 billion in June from $46.88 billion in May. That was a result of a 4.3% plunge in exports and a 3.3% jump in imports, driven heavily by a higher bill for oil from overseas. Some economists said the trade data may mean second-quarter growth could be revised down to an annual rate of about 2.5% from the government’s 3% initial estimate.
Slowing Growth Stirs Doubts Over Global Recovery
Record Trade Gap Hits U.S. As Export Markets Falter;
China Takes On Crucial Role
By Greg Ip and Patrick Barta
Wall Street Journal, August 16, 2004; Page A1
Fed exposes fragility of US economic expansion
Independent (UK), 16 August 2004