Latest news with #economic indicators
Japan Times
6 days ago
- Business
- Japan Times
Japan might be in a technical recession already
Recent economic indicators suggest that Japan might already be in recession, according to a think tank report released last week, as wages remain stagnant and consumer sentiment weak. Gross domestic product (GDP) may have contracted 0.2% in the April-June quarter on an annualized basis adjusted for inflation, Mizuho Research & Technologies said in the report. 'Given consumer sentiment and wage trends, it's likely that consumption remained weak and dragged down the overall economy,' said Saisuke Sakai, chief economist at Mizuho Research & Technologies, who wrote the report. In the January-March quarter, real GDP shrank by 0.2%. A recession is commonly defined as two consecutive quarters of negative GDP growth, though officially calling a recession depends on a wider range of indicators. In Japan, recessions are determined by the Cabinet Office's Economic and Social Research Institute (ESRI). The ESRI bases its assessment on a monthly coincident index that has ten components, including industrial production, retail sales and exports, according to a report by the Conference Board. Two quarters of negative GDP growth alone is usually referred to as a technical recession. Sakai pointed out the economy remained weak in the April-June quarter. Inflation was above 3% every month in that quarter, with food inflation topping 6%. Pay increases lagged price increases for a fifth straight month in May. Consumer sentiment was very weak, according to a Bank of Japan survey released earlier this month. In that report, the diffusion index on living conditions was minus 57.2, the worst reading in nearly 16 years. The index is calculated by subtracting the percentage of people who said living conditions have worsened from the percentage who said conditions have improved. 'This survey was quite shocking," Sakai said. "It seems people are really feeling their living conditions have become tougher due to three consecutive years of declining real wages." The government is scheduled to announce GDP data for the April-July quarter on Aug. 15. Japan may have fallen into a technical recession, but there is no need to be overly pessimistic about the economic situation, Sakai said. The projected contraction of minus 0.2% is quite small, while Japan's potential growth rate is believed to be only in the low-to-mid 0% range, he noted. 'I'd say the Japanese economy has yet to face an economic downturn. For the Japanese economy, this level of negative growth is within the realm of normal fluctuations,' Sakai said. The last time Japan experienced a technical recession was when GDP fell for three consecutive quarters from mid-2023 to early 2024. Since the report by Mizuho Research & Technologies was issued, Japan and the United States achieved a breakthrough in trade talks, and this could be a net positive for the economy. The new 'reciprocal' tariff rate for exports to the United States will be set at 15%, and the rate on cars will be 12.5%. The 50% tariff on steel and aluminum products will remain unchanged. Politics is the main wildcard. The Liberal Democratic Party-Komeito coalition no longer has control of either of the houses in parliament after a drubbing in Sunday's Upper House election, and media reported Wednesday that Prime Minister Shigeru Ishiba is set to step down by the end of August, although the prime minister denied the report.
Bloomberg
18-07-2025
- Business
- Bloomberg
Indian Government Needs More Data Access, Says Key Statistician
A senior Indian statistician is urging greater data-sharing with the federal government, including access to mobile payments and official records, to improve the accuracy and reliability of key economic indicators. Many institutions — including banks, payments companies, transport providers, and even government departments such as tax and railways — are reluctant to share data with the federal government due to privacy and legal concerns, said Rajeeva Laxman Karandikar, chairman of the National Statistical Commission, the top advisory body to the Ministry of Statistics and Programme Implementation, in an interview Wednesday.
Globe and Mail
14-07-2025
- Business
- Globe and Mail
This Mistake Could Cost Investors in 2025
Key Points Despite bullish economic headlines, factors such as labor participation and core inflation signal caution. Instead of relying on lagging indicators in isolation, analyze several metrics together to avoid costly investment traps. Microsoft and Broadcom are two resilient AI-powered stocks that are good picks in the current economic environment. 10 stocks we like better than Microsoft › Investors have gotten good news lately. The U.S. stock market reacted positively to a stable unemployment rate of 4.1 % in June 2025, which was lower than the expected 4.3%. A dip in the Consumer Price Index (a metric used to gauge inflation) from 3.3% in May 2024 to 2.4% in May 2025 helped alleviate concerns about inflation. The Federal Reserve held its benchmark interest rates steady between 4.25% and 4.50% in June 2025, while the next rate cut is likely scheduled for September 2025. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Against the backdrop of encouraging economic numbers and reduced concerns about tariff wars, the benchmark S&P 500 (SNPINDEX: ^GSPC) index hit record highs. Despite the current market optimism, picking stocks based solely on a few economic metrics can be risky. Instead, investors should consider data across various aspects of the economy -- such as employment, inflation, and production -- and make sure they aren't missing the bigger picture. Economic metrics can be deceptive Consider the employment rate in June 2025. Although it appears healthy, the economy is currently facing critical problems, including a decline in overall labor force participation and slower job creation. The labor force participation rate has fallen to 62.3%, the lowest it has been since late 2022. Private sector nonfarm payrolls increased by only 147,000 jobs in June 2025, far lower than the 180,000 to 200,000 jobs per month estimated to be required to maintain growth in the working-age population. While inflation appears to be under control based on headline CPI numbers, the core CPI (excluding food and energy) rose 2.9% for the 12 months ending in May 2025. Inflation persists in areas such as insurance, medical services, and housing. Industrial production numbers are also mixed. While manufacturing grew 4.8% in the first quarter of 2025, manufacturing production declined by almost 0.5% in April, primarily due to a decline in motor vehicle output. Manufacturing output rose just 0.1% in May 2025, as an increase in motor vehicle and aircraft output was offset by weakness in other areas. So, does the economy seem strong enough to match the market exuberance? I don't think so. Analyzing historical case studies To demonstrate how relying on lagging indicators alone can prove problematic for investors' portfolios, we can analyze two specific case studies. In June 2020, a record jobs report showed that 4.8 million nonfarm payroll jobs were added and unemployment had dropped to 11.1% from the expected 12.4%, sending the markets soaring. Investors were optimistic, anticipating a strong rebound in the coming months following the pandemic-related lockdowns. However, the market exuberance was short-lived, as megacap tech stocks primarily experienced a dramatic decline in September 2020. Wall Street had overlooked the acceleration of COVID-19 cases in certain key states and low overall consumer confidence. The jobs report was also based on data collected during the initial reopenings, which included the temporary rehiring of workers and did not account for job suspensions and rollbacks in regions experiencing a resurgence in COVID-19 cases. The challenging macroeconomic conditions raised concerns about the tech stock valuations being too high. Then, in March 2023 markets surged due to cooler-than-anticipated inflation numbers and increased expectations that the Federal Reserve would ease its aggressive interest rate hiking. This led to capital flowing into rate-sensitive sectors such as technology, consumer discretionary, and communication services. However, while the headline CPI was cooling down, shelter costs increased month over month by 0.6% in March 2023. Although this was the smallest monthly gain since November 2022, it still resulted in an 8.2% year-over-year rise in shelter costs. Additionally, the March 2023 CPI reading of 5% was still 2.5 times the Federal Reserve's target of 2%. Hence, contrary to market expectations, the Federal Reserve delivered its 10th consecutive interest rate hike in May 2023, raising the benchmark rate to 5%-5.25%, the highest since August 2007. Not surprisingly, the very sectors that had benefited from the March rally, including housing stocks and fintech companies, suffered the most after the rate hikes were announced. These case studies highlight the importance of thoroughly examining lagging indicators to comprehend the investment landscape accurately. Stocks for the current cautious economic environment In this environment of a softening labor market, with declining job openings, reduced labor force participation, and persistent uncertainty surrounding tariffs, it makes sense to take stakes in fundamentally strong companies with recurring revenue streams and high pricing power. Leading cloud and enterprise software player Microsoft (NASDAQ: MSFT) could prove to be a smart pick in periods of economic ambiguity thanks to its diversified business model, recurring revenue streams, and strong balance sheet. The company plans to invest $80 billion in AI infrastructure and data centers in fiscal 2026 (ending June 30, 2026), aiming to capture a significant share of the AI market, which is estimated to be worth nearly $1.8 trillion by 2032. Microsoft's increasingly dominant AI ecosystem, which includes Azure AI services, Copilot virtual assistant integrated across its various software offerings, and AI-powered personal computers, is expected to be a significant growth catalyst even in a challenging market environment. Custom data center chip and advanced networking infrastructure provider Broadcom (NASDAQ: AVGO) is another stock that is benefiting dramatically from the ongoing AI infrastructure boom. The company's AI-related revenues surged 46% year over year to $4.4 billion in the second quarter of fiscal 2025 (ending May 4, 2025). Broadcom's AI networking business also grew over 170% year over year in the second quarter, capturing 40% of total AI revenue. Analysts expect the company's AI revenue to be $15 billion to $18 billion in fiscal 2025, driven by rising demand for large AI clusters from its existing three major hyperscaler clients, as well as the addition of new hyperscaler customers. Furthermore, Broadcom's $61 billion acquisition of VMware has also strengthened the company's position in the hybrid cloud and networking software space. Do your homework Relying on economic headlines for investment decisions can prove harmful in the long run. Instead, it makes sense to triangulate economic data and pick stocks that have low downside risk in the current environment. By avoiding potential traps, you can build a solid portfolio for long-term wealth generation. Should you invest $1,000 in Microsoft right now? Before you buy stock in Microsoft, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 14, 2025
Yahoo
20-06-2025
- Business
- Yahoo
Dollar and Gold Slide on Hopes of De-Escalation in Israel-Iran Conflict
The dollar index (DXY00) today is down by -0.16%. The dollar is under pressure today on an easing of safe-haven demand as stocks rose after Reuters reported that the Iranian government said it is ready to discuss limitations on its uranium enrichment levels. Also, President Trump said he is willing to give diplomacy more time and won't decide to strike Iran for another two weeks. In addition, dovish comments today from Fed Governor Waller weighed on the dollar when he said, "I think we have room to bring interest rates down as early as July." The dollar remained lower on the weaker-than-expected Philadelphia Fed business outlook report. Dollar and Gold Slide on Hopes of De-Escalation in Israel-Iran Conflict Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. The US June Philadelphia Fed business outlook survey was unchanged at -4.0, weaker than expectations of an increase to -1.5. US May leading economic indicators index fell -0.1% m/m, right on expectations, and the sixth consecutive month that the LEI has declined. Fed Governor Waller said, "I think we have room to bring interest rates down as early as July, and then we can see kind of see what happens with inflation." The markets are discounting the chances at 15% for a -25 bp rate cut after the July 29-30 FOMC meeting. EUR/USD (^EURUSD) today is up by +0.10%. The euro is moving higher today due to weakness in the dollar. However, gains in the euro are limited after the Eurozone's June consumer confidence index unexpectedly fell and after German May producer prices posted their biggest decline in eight months, which were dovish factors for ECB policy. The Eurozone June consumer confidence index unexpectedly fell -0.1 to -15.3, weaker than expectations of an increase to -14.9. German May PPI fell -1.2% y/y, right on expectations and the biggest decline in 8 months. Swaps are discounting the chances at 7% for a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) today is up by +0.31%. The yen gave up overnight gains and fell to a 3-week low against the dollar today as an easing of Middle East tensions curbed safe-haven demand for the yen. Reuters reported that the Iranian government said it is ready to discuss limitations on its uranium enrichment levels, and President Trump said he's willing to give two weeks to see if diplomacy will work before attacking Iran. Higher T-note yields today are also weighing on the yen. The yen initially moved higher today after Japan's May national CPI excluding fresh food and energy rose more than expected, the most in 16 months, a hawkish factor for BOJ policy. Also, comments from BOJ Governor Ueda were positive for the yen when he said the BOJ will raise the benchmark interest rate if its economic outlook is realized. Japan's May national CPI rose +3.5% y/y, right on expectations. May national CPI ex-fresh food and energy rose +3.3% y/y, stronger than expectations of +3.2% y/y and the largest increase in 16 months. BOJ Governor Ueda said Japan's real interest rate is significantly low, and the BOJ will raise the benchmark interest rate if its economic outlook is realized. August gold (GCQ25) today is down -21.00 (-0.62%), and July silver (SIN25) is down -0.923 (-2.50%). Precious metals are retreating today, with gold sliding to a one-week low and silver falling sharply to a two-week low. An easing of Middle East tensions sparked long liquidation in precious metals after President Trump signaled he wants to give diplomacy a chance and will wait two weeks before deciding if the US would strike Iran. Precious metals also fell on today's report from Reuters that the Iranian government said it is ready to discuss limitations on its uranium enrichment levels, a sign that Iran may want to negotiate its way out of war with the US. In addition, hawkish comments from BOJ Governor Ueda undercut precious metals when he said the BOJ will raise the benchmark interest rate if its economic outlook is realized. Today's dollar weakness is supportive of metals prices. Also, dovish comments today from Fed Governor Waller boosted demand for gold as a store of value when he said, "I think we have room to bring interest rates down as early as July." In addition, Thursday's report from Bloomberg that said senior US officials are preparing for a possible strike on Iran boosted safe-haven demand for precious metals. Industrial metals demand concerns also weighed on silver prices due to the weaker-than-expected US Jun Philadelphia Fed business outlook survey and the weaker-than-expected UK May retail sales report. Fund buying of silver continues to support prices as silver holdings in ETFs rose to a 2-1/4 year high Thursday. UK May retail sales ex-auto fuel fell -2.8% m/m, weaker than expectations of -0.7% m/m and the biggest decline in nearly 1-1/2 years. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
