Just yesterday, the latest figures on US consumer optimism took a surprising hit as an index of consumer confidence dropped to 49.3 in June from 54.8 in May after showing signs of a recovery for the last 3 months. Perhaps consumers have began to realize that "less bad is probably not good enough", that less bad still doesn't pay bills.
In US housing, the latest Case Shiller home price index saw house prices in 20 metropolitan areas fall 0.6% m-o-m in April compared to a 2.2% decline in March. Still, prices are 18.1% lower than last year. This potential 'green shoot' is overshadowed by the fact that delinquency rates on the least risky mortgages more than doubled from a year earlier, signaling more trouble on the horizon.
Across the Atlantic, the pound sterling reversed it's gains in recent weeks as revised figures saw first quarter GDP figures shrinking by 2.4% q-o-q, instead of the 1.9% reported earlier. In fact, this latest figure is UK's biggest q-o-q decline since 1958, while its 4.8% y-o-y drop was the largest since records began in 1948.
In the Eurozone, inflation turned negative for the first time ever since records started in 1991, as consumer prices were 0.1% lower y-o-y in June. However, this was more a reflection of the sharply lower energy costs. Core inflation stripped off energy costs still remained in positive territory.
More bad news from the ECB showed that liquidity injections have not stemmed the reversal of credit flows to the economy. In May, businesses repaid a net €5bn in loans, slowing annual rate of growth in lending to 4.4%. Household borrowing summed up the distressing news as the annual rate of growth turned negative, with loans down 0.2% on the year.
In Germany, seasonally adjusted unemployment rose by 31,000 to 3.495m, which means Germany now contents with a 8.3% unemployment rate. Seriously, where are the 'green shoots'??
