U.S. consumers spent less in March while jobless claims fell last week, data showed on Thursday, offering a mixed picture from the world's biggest economy on a recession that central banks say could be easing.
Hints at stabilisation were too late for U.S. automaker Chrysler, which will now proceed with Chapter 11 bankruptcy protection. [nWAT011379]
The U.S. Commerce Department said spending fell 0.2 percent after a revised 0.4 percent increase in February, previously reported as a 0.2 percent rise.
But separate figures showed the number of U.S. workers filing new claims for jobless aid unexpectedly declined by 14,000.
The jobless claims taken with a slightly more robust employment reading from Germany and an improvement in Japan's industrial output for the first time in six months, helped to brighten global stock market sentiment. [nBRQ007306]
"The cumulative weight of the evidence over the last several weeks is that the economy is moving closer to a trough," said David Resler, chief economist at Nomura securities in New York.
"I don't know that we're there yet, but I think we're in the vicinity of the low point and beyond that lies a very sluggish and hesitant recovery, but nonetheless a period of expanding activity instead of contracting activity," he added.
Policymakers had already set a more positive tone.
The Bank of Japan (BoJ) on Thursday joined the U.S. Federal Reserve in offering a more optimistic view on global recession, helping markets offset worse-than-expected job losses in Europe.
The BoJ said the pace of deterioration in Japan's economy would slow and cited signs the global economy was already levelling off, striking a more optimistic note than it did three weeks ago. [nT277157]
"The Japanese economy is moving in a desirable direction and is likely to recover gradually in the second half of fiscal 2009/10," Governor Masaaki Shirakawa told a news conference.
Still, the BoJ slashed its GDP forecast to a 3.1 percent contraction for the year to March 2010 from 2.0 percent.
In Europe, where a day earlier Germany forecast economic contraction of 6 percent for the year, European Central Bank Governing Council member Ewald Nowotny also offered optimism regarding recovery in 2010.
"I do indeed see green shoots for the European economy although the general perspective is of course that we will have negative growth rates in 2009. I do see perspectives for a positive development in 2010," he told reporters in Vienna. [nLU092241]
FED SPEAKS
The Federal Reserve said on Wednesday that it would hold benchmark overnight interest rates in a range of zero to 0.25 percent as it took stock of some recent hopeful economic signs. [ID:nN29410693]
"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the Fed said.
The MSCI's all country stocks index <.MIWD00000PUS> on Thursday was on course for a 12 percent rise for April — its biggest monthly gain in its 20-year history. [MKTS/GLOB]
"We've seen the stabilisation in the market, so the downside momentum is slowing, that is what the leading indicators are telling us, be it in the U.S. or the euro zone," said Michael Klawitter, senior forex strategist at Dresdner Kleinwort in Frankfurt. "Despite the discussion of swine flu, the market no longer sees this as an economic risk."
Mexican President Felipe Calderon told his people to stay home from Friday for a five-day partial shutdown of the economy and the World Health Organisation said a swine flu pandemic was imminent.
The WHO raised its official alert level to phase 5, the last step before a pandemic is declared. [nFLU]
