U.S. economy contracted an estimated 3.5% in 2020, worst drop since WW2

The U.S. economy contracted 3.5 per cent in 2020, the Commerce Department reported Thursday, the worst economic freeze since the end of the Second World War.

The report estimated that the nation's gross domestic product — its total output of goods and services — slowed sharply in the October-December quarter after a record 33.4 per cent surge in the July-September quarter. That gain had followed a record-shattering annual plunge of 31.4 per cent in the April-June quarter.

The economy grew at a four per cent annual rate in the final three months of 2020.

The report estimated that the nation's gross domestic product — its total output of goods and services — slowed sharply in the October-December quarter after a record 33.4 per cent surge in the July-September quarter. That gain had followed a record-shattering annual plunge of 31.4 per cent in the April-June quarter.

The economy grew at a four per cent annual rate in the final three months of 2020.

Read more at:U.S. economy contracted an estimated 3.5% in 2020, worst drop since WW2 | CBC News

The Netherlands: Population growth halves as coronavirus cuts immigration

The population of the Netherlands grew by 63,000 last year, half the increase recorded in 2019, according to new figures from national statistics agency CBS.

The increase, driven largely by EU migration, took the population to almost 17.5 million by the end of the year, the CBS said in its initial forecast. The decline in growth is due both to more people dying in the first half of the year and a downturn in the number of new immigrants and international students coming to the Netherlands, the CBS said.

Read more at: Population growth halves as coronavirus cuts immigration - DutchNews.nl

The Netherlands: Dutch economy expected to grow again next year, Covid-19 effects to linger

The Dutch economy will  shrink by 5.1 percent this year, but recovery will start at the end of the year and in 2021 the economy will grow b3.2 percent, according to central planning office CPB's draft-macroeconomic foresight studies. The effects of the Covid-19 crisis will linger, however, with unemployment rising to 7 percent next year.

The CPB expects all parts of the economy to recover somewhat nextyear. Household consumption will decrease by 5.9 percent this year, and increase by 4.1 percent next year. Investments will go from -7.5 percent his year, to plus 4.4 percent next year. Exports will decrease by 5.2 percent this year, but increase by 4.7 percent next year, and imports will go from -3.7 percent this year to plus 5.4 percent in 2021. Government consumption is the only factor that won't see a decrease this year. It is expected to increase by 2.9 percent this year and by 2.0
percent next year.

CPB director Pieter Hasekamp told NOS that the coronavirus blow to the Dutch economy is "unprecedentedly hard" and "largely yet to befelt". "The corona crisis also has major consequences or things that affect the quality of life: we miss celebrating a wedding oranniversary, the theater and concert stages are empty, and there are serious concerns about loneliness in nursing homes."

Read more at: 
Dutch economy expected to grow again next year, Covid-19 effects to linger | NL Times

Wall Street: Everything you know about growth and value stocks is about to flip

Skilled active investment managers now have a huge opportunity to add value, writes Mark Hulbert.

Read more at
https://www.marketwatch.com/story/everything-you-know-about-growth-and-value-stocks-is-about-to-flip-2020-05-07

France: French Economy to Grow 1.3% With a Pension Deal, Le Maire Says -by Phil Serafino

The French economy will grow 1.3% this year, the same pace as 2019, as long as a compromise is reached quickly with labor unions that are on strike over pension reform, Finance Minister Bruno Le Maire said in an interview with the Journal du Dimanche.

“The economic outlook for France is good and solid,” Le Maire told the newspaper. The economy has created more than 500,000 jobs since 2017, and unemployment should drop to 7% by the end of President Emmanuel Macron’s term in 2022, he said. The jobless rate was 8.3% in the third quarter.

Read more: French Economy to Grow 1.3% With a Pension Deal, Le Maire Says - Bloomberg

France: French Economy to Grow 1.3% With a Pension Deal, Le Maire Says -by Phil Serafino

The French economy will grow 1.3% this year, the same pace as 2019, as long as a compromise is reached quickly with labor unions that are on strike over pension reform, Finance Minister Bruno Le Maire said in an interview with the Journal du Dimanche.

“The economic outlook for France is good and solid,” Le Maire told the newspaper. The economy has created more than 500,000 jobs since 2017, and unemployment should drop to 7% by the end of President Emmanuel Macron’s term in 2022, he said. The jobless rate was 8.3% in the third quarter.

Read more: French Economy to Grow 1.3% With a Pension Deal, Le Maire Says - Bloomberg

EU Economy: Italy, Germany Drag on Euro-Area Economy as EU Cuts Outlook - by Viktoria Dendrinou

The European Commission slashed its growth forecasts for all the euro region’s major economies from Germany to Italy and warned that Brexit and the slowdown in China threaten to make the outlook even worse.

The European Union’s executive arm delivered a downbeat report on Thursday that shaved a whole percentage point off its 2019 projection for Italy, now seen with minimal expansion of just 0.2 percent for the whole year. Officials in Brussels warned that the region’s outlook faces “substantial” risks.

The gloomier forecasts reflect more pronounced weakness in the region, which stumbled at the end of 2018 as political instability continued to rock Italy, violent protests in France depressed output, and Germany’s car industry struggled to rebound from changes in regulation. Global trade uncertainty and a sharper-than-expected slowdown in China also pose external risks to the economic outlook.

Read more at: Italy, Germany Drag on Euro-Area Economy as EU Cuts Outlook - Bloomberg

EU Economy: GDP and main aggregates estimate for the first quarter of 201 8 GDP up by 0.4% in both euro area and EU28 +2.5% and + 2.4% respectively compared with the first quarter of 2017

Seasonally adjusted GDP rose by 0.4% in both the Euro area (EA19) and the EU28 during the first quarter of 2018, compared with the previous quarter,according to an estimate published by Eurostat.

In the fourth quarter of 2017, GDP had grown by 0.7% in both zones

Compared with the same quarter of the previous year, seasonally adjusted GDP rose by by 2.4% in the EU28 in the first quarter of 2018, after +2.8% and +2.7% respectively in the previous quarter..

For the complete report go to Eurostat

EU Economy: Spring 2018 Economic Forecast: Expansion to continue amid new risks

Growth rates for the EU and the euro area beat expectations in 2017 to reach a 10-year high at 2.4%. Growth is set to remain strong in 2018 and ease only slightly in 2019, with growth of 2.3% and 2.0% respectively in both the EU and the euro area.

Private consumption remains strong, while exports and investment have increased. Unemployment continues to fall and is now around pre-crisis levels. However, the economy is more exposed to external risk factors, which have strengthened and become more negative.

Robust growth is facilitating a further reduction in government deficit and debt levels and an improvement in labour market conditions. The aggregate deficit for the euro area is now less than 1% of GDP and is forecast to fall under 3% in all euro area Member States this year.

Read more: European Commission - PRESS RELEASES - Press release - Spring 2018 Economic Forecast: Expansion to continue amid new risks

U.S. Economic Forecast: Growth of the economy to continue through 2018

For the first time since the middle of 2014, the US economy has sustained 3 percent growth for two consecutive quarters, providing strong momentum into next year. The current Conference Board forecast calls for 2.8 percent growth during the final quarter of 2017 and 2.5 percent growth in 2018.

This would represent the economy’s best 2-year run since 2005.

Business investment has awakened from the doldrums this year, rising by more than 4 percent after falling into negative territory in 2016. Confidence in the manufacturing sector has been especially strong.

The composition of growth supports a long-term improvement in productivity. Capital equipment has risen at an 8.7 percent annual rate during the past two quarters, while investment in warehouse structures is up more than 20 percent since the end of last year. These investments demonstrate a renewed firm commitment to increased efficiency.

Consumer spending eased a bit in the third quarter, but with The Conference Board’s Consumer Confidence Index still strong and housing prices rising, expect a robust holiday season.

One encouraging sign was the pickup in motor vehicle spending thanks to renewed demand following the two hurricanes. Should employment growth rebound quickly from last month’s storm related decline, tighter labor markets should translate into a renewed wage acceleration which could boost spending late this year or into 2018. The possibility of federal income tax cuts could do the same.

The economy enters 2018 in good position to maintain strong growth from 2017.

Current Fed chair Janet Yellen and new Fed chair nominee Jerome Powell may raise rates slightly faster as a result. These expectations have led long-term rates to rise modestly.

The dollar has also started strengthening since early September after weakening through much of 2017, creating less favorable terms of trade. Higher capital costs and the possibility of a less supportive external environment for growth have not rattled the market yet.

With growth prospects strong for 2018, profits should grow robustly as well, rewarding those businesses that increase investment levels.

Read more: U.S. Forecast | The Conference Board

EU: Exports and low unemployment fuel rapid growth in central Europe - by James Shotter

Central Europe’s economies have continued their rapid expansion, outpacing their peers in western Europe as rock bottom interest rates and record low unemployment fuel consumer spending.

With the eurozone’s recovery also pushing up exports from the region, Romania’s economy grew at the fastest annual rate in the EU in the second quarter.

The Czech Republic, Poland, Slovakia and Hungary also reported strong growth, according to preliminary data on Wednesday.

Romania grew by 5.7 per cent year on year in the second quarter. The Czech Republic grew by 4.5 per cent, Poland by 4.4 per cent, Hungary by 3.6 per cent and Slovakia by 3.1 per cent. The EU grew by 2.3 per cent.

Read more: Exports and low unemployment fuel rapid growth in central Europe

Europe’s Economy Strains as Global Slowdown Takes its Toll - by Jill Ward

The euro area is showing signs of strain from the global slowdown.

Weaker growth and deeper price cuts by companies, as captured in a monthly report by Market Economics published Monday, will raise concerns about the health of the economy. They may also increase pressure on European Central Bank policy makers to add to stimulus at their next meeting in March.

Markit said that its composite Purchasing Managers Index for the euro zone fell to 52.7, the lowest in more than a year, from 53.6. In Germany, manufacturing took a hit from falling overseas demand, while the composite gauge for France signaled “sluggish” economic growth.

“Not only did the survey indicate the weakest pace of economic growth for just over a year, but deflationary forces intensified,” said Chris Williamson, chief economist at Markit in London. The data “greatly increase the odds of more aggressive stimulus from the ECB.”

The Organization for Economic Cooperation and Development cut its forecasts for the euro region last week, and ECB officials are reviewing whether their current stimulus program is enough to counter global pressure. They’ve expressed concern that a renewed slump in oil prices is adding to risks that low inflation becomes entrenched.

Markit said euro-region economic growth this quarter may fall short of the 0.3 percent seen at the end of 2015.

“This month’s PMI indicates further deflationary pressures in the euro zone," said Bert Colijn, an economist at ING in Amsterdam. “As businesses continue to charge less for goods and services, it seems unlikely that inflation will pick up in the months ahead, which could be an additional trigger for the ECB to act in March.”

Markit’s German factory index fell to 50.2 this month, barely above the key 50 level that divides expansion from contraction.


Read more: Europe’s Economy Strains as Global Slowdown Takes its Toll - Bloomberg Business

Global Economy: Has Capitalism Seen Its Day? - by Wolfgang Streeck

Several years after the Lehman Brothers collapse, the crisis of advanced capitalist economies is far from over. Growth is sluggish, debt continues to rise, and social inequality is exploding.

As the capitalist global economy is kept alive by unprecedented infusions of central bank money, old questions of the compatibility of capitalism and democracy are returning. The marketization of Polanyi’s three fictitious commodities – labour, nature and money – seems to have hit a limit, and the same may be true for technological innovation. Moreover, persistent public deficits seem to indicate a rising tension between 

o see the video presentation click here: : Has Capitalism Seen Its Day?

European Economy: Future of SMEs: Europe’s economic powerhouses

Small and medium businesses (SMEs) are the heart of Europe’s economy but some have not survived the financial crisis and many others have had to innovate to have any kind of a future. Real Economy travelled to Italy to meet some of those who have risen to that challenge, often tapping into new sources of financing when lending from the banking sector was drying up.

There are some 21 million SMEs in Europe, supplying about 85% of jobs. All that entrepreneurship allows Europe to control one fifth of world trade and that’s why it’s so important to understand these economic powerhouses and why they are so critical.

It works something like this: Jack has a micro-sized glass making company, which employs less than 10 people and makes around two million euros a year. Jack then supplies his glass to Greg’s small company which makes mosaics – Greg has earnings of less than 10 million and fewer than 50 employees. Greg then sells his mosaics to Linda who is a medium-sized mosaic and tile seller. She has 250 people or less on her payroll and her business makes 50 million euros.

However, if any of them are taken over, linked to or partnered with a large company, or are 50% owned by universities or local authorities they may no longer be considered SMEs. Jack, Greg, Linda and others like them create 2 out of every 3 jobs in Europe. Companies like theirs make up 9 out of 10 businesses in Europe, creating the value added that drives our growth.

Read more: Future of SMEs: Europe’s economic powerhouses | euronews, real economy