Main economic data from U.S. and Asia

U.S

Financial markets were affected this week by politicians’ statements regarding the progress (or lack thereof) in finding a solution for the fiscal cliff.

In the bottom line it appears that no significant progress was made, though most estimates are that an agreement will be reached by the end of the year.

More U.S. economic data keeps surprising.

Growth figures for the third quarter were revised sharply upwards (+2.7% annualized vs. 2.0% in previous estimation).

However, examination of growth components is less encouraging.

The upward revision was mainly due to sharp increase in the volume of inventory (which will detract from growth in the fourth quarter) and due to encouraging increase in exports.

On the other hand, private consumption and investments’ volume were revised downward.

In context of fourth quarter’s data, the Conference board’s consumer confidence index rose in November for the third consecutive month to its highest level since February 2008, a sign for an upcoming expansion of U.S. private consumption.

It also implies a slight improvement in production activity, and the continuing recovery trend of U.S. real estate sector.

We note that according to the “Beige Book” (Summary of Commentary on Current Economic Conditions), The U.S. economy grew in the past six weeks in a measured pace.

The report confirms the assessment of Fed Chairman Bernanke, that if an agreement is reached regarding the fiscal cliff it will “help make the New Year a very good one for the American economy”.

Asia

The variety of fiscal and monetary measures implemented in recent months continues to be reflected by China’s macro data improvement

Chinese manufacturing PMI (Purchasing Managers’ Index) rose in November to a level of 50.6 (vs. 50.2 in October), and a sharp increase was recorded in the industrial sector’s earnings in October (+20.5% vs. +7.8% in September- yearly).

Finally, we positively note that credit rating company S&P, has confirmed China’s debt rating at AA- and kept the outlook ‘stable’.

In contrast, India’s GDP data for the third quarter showed a continued moderation in growth rate, which stood in the third quarter at 5.3% (yearly), compared with a rate of 6.1% in 2011 and 8.2% in 2010.

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