“Australia’s A$249 billion ($258 billion) retail industry will see its best-ever month of sales in December as the cutting of interest rates to record lows revives flagging consumer sentiment, an industry group said.

Sales on Boxing Day, a public holiday that’s traditionally one of the busiest in the country’s retail calendar, will rise 2.5 percent from a year earlier to A$1.8 billion, according to a forecast from the Australian National Retailers’ Association, or ANRA. Sales during December, the busiest shopping month of the year, may total A$28.4 billion, the group said in an e-mail on Dec. 21…”

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Philly Fed: Prior -10.7, Market Expects -1.3, Actual +0.8.1% More on the Business Outlook

Existing Home Sales: Prior 4.79m, Market Expects 4.9 m, Actual 5.04m

Leading Indicators: Prior 0.2%, Market expects 0.2%, Actual -0.2%

Initial Claims: Prior 343k, Market Expects 345k, Actual 361k

Q3 GDP Prior 2.7, Market Expects 2,7, Actual 3.1%

“New Zealand’s economic growth slowed more than economists forecast last quarter amid a drop in manufacturing and farm output, sending the currency toward its steepest weekly decline since May.

Gross domestic product rose 0.2 percent in the three months ended Sept. 30 from the previous quarter, when it expanded a revised 0.3 percent, Statistics New Zealand said in a report released today in Wellington. Growth matched the central bank’s 0.2 percent forecast and was half the 0.4 percent median estimate in a Bloomberg News survey of 13 economists…”

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“Hong Kong’s overheated property market is increasingly disconnected from the rest of the economy and poses “macro-financial risks,” the city’s monetary authority said.

Loose global monetary conditions and low interest rates may fuel mortgage borrowing that intensifies “the disconnect between property prices and economic fundamentals,” the Hong Kong Monetary Authority said yesterday in a quarterly report….”

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“Brazil’s inflation quickened more than analysts expected in the month through mid-December as food and service prices continued to rise even amid slower growth.

Prices as measured by the IPCA-15 price index rose 0.69 percent from Nov. 14 through Dec. 1, the fastest pace in 19 months, the national statistics agency said today. The median estimatefrom 41 analysts surveyed by Bloomberg was for a 0.64 percent increase. Annual inflation quickened to 5.78 percent compared with the 4.5 percent mid-point of the central bank’s target.

Policy makers have cut Brazil’s benchmark lending rate by 525 basis points since August 2011, more than any other Group of 20 nation, to a record 7.25 percent, and pledged to keep the rate at that level for a “prolonged period.” President Dilma Rousseff’s administration has also lowered sales taxes, eliminated payroll taxes, and reduced reserve requirements to boost economic growth…”

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“Japan’s exports fell for a sixth month in November and the trade deficit swelled, underscoring the challenge that incoming Prime Minister Shinzo Abe faces in reviving growth.

Shipments slid 4.1 percent from a year earlier, the Finance Ministry said in Tokyo today. The median forecast of 23 economists was for a 5.5 percent decline. Imports rose 0.8 percent leaving a deficit of 953.4 billion yen ($11.3 billion), the third-largest on record.”

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Hurricane Sandy strikes again….

“Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.

Exports from the 17-nation currency bloc declined a seasonally adjusted 1.4 percent from September, when they fell 1.3 percent, the European Union’s statistics office in Luxembourg said today. Imports rose 0.6 percent in October and the trade surplus narrowed to 7.9 billion euros ($10.4 billion) from a revised 11 billion euros in the previous month. Labor- cost growth accelerated to 2 percent in the third quarter from 1.9 percent in the prior three months, a separate report showed.

The euro-area economy shrank 0.1 percent in the third quarter after a 0.2 percent contraction in the previous three months. The European Central Bank this month lowered its outlook for this year and 2013. Still, investor confidence in Germany, the region’s largest economy, jumped to a seven-month high this month and economic confidence in the euro area unexpectedly rose in November.

“There aren’t many signs that the economy will be improving before the second half of next year,” said Annalisa Piazza, an analyst at Newedge Group in London. “At least, things aren’t going to be worse than this year. Confidence has improved because of the perception that the ECB and European leaders are slowly but surely moving in the right direction.”

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“China said it will seek a higher “quality and efficiency” of growth next year, signaling new leaders may accept a reduced pace of expansion in exchange for a more sustainable model.

There was no mention of seeking “relatively fast” growth, a policy in place since 2006, in a report yesterday by the state-run Xinhua News Agency after the annual central economic work conference in Beijing. Leaders vowed to target “sustained and healthy development” as they maintain a “prudent” monetary policy and “proactive” fiscal stance, Xinhua said.

Chinese leaders assuming power in a once-a-decade handover to be completed in March must decide the pace of market-driven change to boost consumer demand and rein in the role ofexports and investment. Communist Party chief Xi Jinping, who made the case for restructuring during a visit to the southern Guangdong province this month, faces an economy likely to have grown this year at the weakest rate since 1999.

“Now the focus is firmly on reform for next year and the future,” said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. “The key to watch is how fast the new leadership will proceed with the real tough structural change and reform. Many of these are easier said than done.”

Even so, “next year is considered a vital year for the new leadership,” so the government will not allow a so-called hard landing in growth, Shen said.”

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“Historically, small businesses have been the primary engine of new job creation in the United States.  If the economy was getting healthy, we would expect to see the number of jobs at new businesses rise.  Instead, we are witnessing just the opposite.  We are told that the economy is supposed to be “recovering”, but the number of “startup jobs” at new businesses has fallen for five years in a row.  According to an analysis of U.S. Department of Labor data performedby economist Tim Kane, there were almost 12 startup jobs per 1000 Americans back in the year 2006.  By 2011, that figure had fallen to less than 8 startup jobs per 1000 Americans.  According to Kane, the number of jobs in the United States at businesses that are less than one year old has fallen from 4.1 million in 1994 to 2.5 million in 2010.  Overall, the number of “new entrepreneurs and business owners” has fallen by more than 50 percent as a percentage of the population since 1977.  The United States was once known as “the land of opportunity”, but now that is fundamentally changing.  At this point we truly do have a “crisis of entrepreneurship” in this country, and that is a huge reason whyAmerica is in decline.  We are witnessing the slow death of the small business in America, and that is incredibly bad news for all of us.

Unfortunately, the problems that small businesses are experiencing right now have been building up for decades….”

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“More weakness in this week’s rail traffic report.  The AAR reported a -0.3% reading in intermodal.  This is the second consecutive negative weekly reading.  This brings the 12 week moving average down to 1.3%.  That’s about in-line with the consensus Q4 GDP predictions and indicative of an economy that is growing, but just slightly.

Here’s more via AAR: ”

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“The nation’s economy could take another multi-billion dollar hit if the International Longshoremen’s Association goes on strike at the end of this month at the nation’s major East Coast and Gulf Coast ports.

The contract between the ILA and the U.S. Maritime Alliance, which negotiates on behalf of management of the ports, terminals and shipping lines, is due to expire at 12:01 a.m. on Dec. 30. It covers the 14 major ports stretching from Boston to Houston.”

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“In what must be one of the scariest data points for equity bulls, Industrial Production just printed above all economist’s estimates with its largest rise since Dec 2010. This 2.5 sigma beat of expectations is the biggest beat since December 2010 and, given that it was data that Ben Bernanke did not have at his previous FOMC meeting, we suggest, ever so humbly, that surely this will play into his qualitative assessment of the economic thersholds and reduce the likelhood of him accelerating his bond-purchases scheme. The driver of such exuberant Industrial Production… Motor Vehicle manufacturing; which as we already know produced the largest channel-stuffing debacle in history. Sustainable? We don’t think so… As previous downward revisions appear to have provided a much bigger than expected rebound from Sandy-scuppered prior levels…”

Full article and chart

“Euro-area services and manufacturing output contracted at a slower pace than economists forecast in December as European leaders declared progress on the latest plan to combat the debt crisis, now entering its fourth year.

A composite index based on a survey of purchasing managers in both industries rose to 47.3 from 46.5 in November, London- based Markit Economics said today. Economists had forecast a November reading of 46.9, according to the median of 16 estimates a Bloomberg News survey. A reading below 50 indicates contraction. A separate report showed European car sales fell 10 percent in November, bringing registrations so far this year to a 19-year low.”

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“India’s inflation unexpectedly eased in November, a moderation that may not spur the central bank to cut interest rates next week as price gains still remain above its comfort level.

The wholesale-price index rose 7.24 percent from a year earlier, after climbing 7.45 percent in October, the Commerce Ministry said in a statement in New Delhi today. The median of 34 estimates in a Bloomberg News survey was a 7.6 percent gain.”

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YoY +1.8%,

ex food and energy + 1.9%

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“China’s manufacturing is expanding at a faster pace this month, suggesting the factory recovery in the world’s second-biggest economy may withstand a slowdown in exports.

The December preliminary reading was 50.9 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with the 50.8 median estimate in a Bloomberg News survey of 12 economists and a final reading of 50.5 for November, the first time in 13 months it was above the expansion-contraction dividing line of 50.

Chinese stocks had their biggest gain in three years as the report bolstered confidence in the economic recovery even as November’s trade and new loans trailed estimates. The data add to signs of a strengthening rebound including factory output and retail sales, which may smooth the transition to China’s new leadership headed by Xi Jinping.

“China’s ongoing growth recovery is gaining momentum mainly driven by domestic demand conditions,” Qu Hongbin, chief China economist at HSBC in Hong Kong, said in a statement. At the same time, a drop in new export orders and last month’s below-forecast overseas shipments suggest “external headwinds” are persisting, Qu said.

“This calls for Beijing to keep an accommodative policy stance to counter-balance the external weakness, provided inflation stays benign,” he said. ”

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“The U.S. Census Bureau reported this morning that U.S. business inventories rose 0.4% month-over-month in October, inline with the consensus estimate published by Bloomberg. Trade sales and manufacturers’ shipments fell 0.4% month-over-month, but were 3.1% higher than sales in October 2011. Inventories were 5.7% higher than a year ago.”

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