U.S. import prices unchanged in January By Reuters



WASHINGTON, (Reuters) – U.S. import prices were unchanged in January as the cost of petroleum products fell, offsetting gains in the prices of motor vehicles and capital goods.

The Labor Department said on Friday last month’s unchanged reading in import prices followed a downwardly revised 0.2% gain in December. Import prices were previously reported to have increased 0.3% in December.

Import prices exclude tariffs. Economists polled by Reuters had forecast import prices falling 0.2% in January.

In the 12 months through January, import prices gained 0.3% after increasing 0.5% in December.

Overall inflation has been moderate, with data on Thursday showing consumer prices in January posting their biggest annual increase since October 2018.

In January, prices for imported fuels and lubricants fell 2.2% after increasing 1.7% in December. Petroleum prices dropped 1.7% after rising 1.0% in December. Imported food prices rose 0.5% last month. That followed a 1.1% jump in December.

Excluding fuels and food, import prices rose 0.2% in January. The so-called core import prices were unchanged in December. Core import prices fell 0.8% in the 12 months through January.

The cost of goods imported from China fell 0.2% in January after being unchanged in the prior month. Prices declined 1.7% year-on-year in January.

The report also showed export prices rose 0.7% in January after falling 0.2% in December. Export prices increased 0.5% on a year-on-year basis in January after dropping 0.9% in December.

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U.S. core retail sales unchanged in January By Reuters



WASHINGTON, (Reuters) – U.S. consumer spending appears to have slowed further in January, with sales at clothing stores declining by the most since 2009, which could raise concerns about the economy’s ability to continue expanding at a moderate pace.

The Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services were unchanged last month. Data for December was revised down to show the so-called core retail sales rising 0.2% instead of jumping 0.5% as previously reported.

Core retail sales correspond most closely with the consumer spending component of gross domestic product.

Economists polled by Reuters had forecast core retail sales rising 0.3% last month.

The unchanged reading in core retail sales suggested consumer spending slowed further after it lost considerable momentum in the fourth quarter.

Fed Chair Jerome Powell told lawmakers this week that the “economy is in a very good place, performing well.” The U.S. central bank last month left interest rates steady. The Fed is widely expected to keep monetary policy on hold this year after it reduced borrowing costs three times in 2019.

The economy grew 2.3% in 2019, slowing from 2.9% in 2018.

Overall retail sales, however, rose 0.3% in January. Data for December was revised down to show retail sales gaining 0.2% instead of climbing 0.3% as previously reported.

Auto sales rebounded 0.2% after slumping 1.7% in December. Receipts at service stations fell 0.5%. Sales at electronics and appliance stores decreased 0.5%.

Sales at building material stores jumped 2.1%, the most since last August, after rising 1.3% in December. Sales were likely boosted by unseasonably mild weather.

Receipts at clothing stores dropped 3.1% last month, the most since March 2009. Online and mail-order retail sales rose 0.3%. That followed a 0.1% dip in December. Receipts at furniture stores rose 0.6%.

Sales at restaurants and bars increased 1.2%. Spending at hobby, musical instrument and book stores edged up 0.1%.

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U.S. January industrial output falls on weather, Boeing drop By Reuters



WASHINGTON (Reuters) – U.S. industrial production fell 0.3% in January as unseasonably warm weather held down the output of utilities and Boeing Co (N:) slowed production of civilian aircraft, the Federal Reserve said on Friday.

The Fed said manufacturing production fell 0.1% in January, matching forecasts, but December’s manufacturing output was revised lower to a 0.1% gain from a previously reported 0.2% gain.

Overall industrial output for December was revised downward to a 0.4% reduction from a previously reported 0.3% drop.

Economists polled by Reuters had forecast industrial output would fall 0.2% in January, with manufacturing output forecast to be down 0.1%. On an annualized basis, production at factories fell 0.8% in January, mirroring the annualized drop in overall industrial production.

Production of aerospace and miscellaneous transportation equipment fell 7.4% in January after a 0.5% increase in December, the Fed said. The drop reflects Boeing’s halt this year of its grounded 737 MAX aircraft.

This was somewhat offset by a rise in vehicle assemblies to 11.29 million units on an annualized basis. Manufacturing output excluding motor vehicles and parts fell 0.3% in January.

Capacity usage at factories, mines and utilities fell to 76.8%, the lowest since September 2017, from 77.1% in December.

U.S. utility production fell 4.0% in January after a 6.2% drop in December, while output at mines rose 1.2% in January after a 1.5% increase in December.

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U.S. government posts $33 billion budget deficit in January By Reuters


U.S. government posts $33 billion budget deficit in January

WASHINGTON (Reuters) – The U.S. government recorded a $33 billion budget deficit in January, the Treasury Department said on Wednesday.

That compared to a budget surplus of $9 billion in the same month a year earlier, according to the Treasury’s monthly budget statement.

Analysts polled by Reuters had forecast an $11.5 billion deficit for last month.

Unadjusted receipts last month totaled $372 billion, up 10% from January 2019, while unadjusted outlays were $405 billion, a jump of 22% from the same month a year earlier.

When adjusted for calendar effects, the deficit for January was $200 million compared with an adjusted deficit of $12 billion in January of last year.

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UK shoppers still wary about spending in January: BRC By Reuters



LONDON (Reuters) – Britons kept a tight grip on their spending last month last month, a survey showed on Tuesday, suggesting that shoppers have not felt the jump in confidence reported by many companies since December’s election broke the Brexit logjam.

Total retail spending edged up by an annual 0.4% in January, the British Retail Consortium said.

The average increase over the past 12 months was just 0.2%, the lowest since BRC’s records began in 1995, while like-for-like retail sales in January, excluding changes in floor space from one year to the next, were flat.

“Although static sales might not appear triumphant, at least it is no further deterioration,” Paul Martin, a partner at accountancy firm KPMG which produces the survey with BRC, said.

“Consumer confidence has started to return post-general election, but we have not experienced any major leaps for the sector yet.”

Prime Minister Boris Johnson won a bigger-than-expected majority on the Dec. 12 election which ended the short-term uncertainty about whether Britain would leave the European Union at the end of January.

There have been signs that businesses and the housing market saw a jump in confidence and activity in January, although many companies are worried about the risk that Britain and the EU fail to get a trade deal by a Dec. 31 deadline.

A separate survey by Barclaycard, which covers a broader range spending, was more upbeat, showing an annual 3.9% jump in spending by consumers in January, boosted by spending on fuel and at supermarkets.

Spending at cinemas jumped by 22%, helped by the release of “1917”, while travel agents and airlines also saw sales rise.

Barclaycard said consumer confidence in the British economy hit its highest level since September 2016 at 42%.

The survey was conducted between Jan. 24 and Jan. 27 by Longitude Research and included responses from 2,004 people.

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Nissan’s China sales fell 12% in January as coronavirus epidemic weighs By Reuters



BEIJING (Reuters) – Japanese carmaker Nissan (T:) said on Friday its sales in China, the world’s biggest auto market, fell by 11.8% in January year-on-year, as the Lunar New Year holiday began earlier than usual and the outbreak of coronavirus stymied economic activity.

The company, which has embarked on a turnaround strategy to tackle a slump in sales, had been counting on strong Chinese business.

Last year, it sold around 1.55 million cars in China, 1.1% lower than a year earlier, but bucking the overall Chinese car market that dropped by 8.2%.

Nissan sold 118,143 vehicles in China last month. It is expected to announce its October-to-December results next week.

The company, which has a joint venture with the Dongfeng Group (HK:), based in Wuhan where the coronavirus has been concentrated, said is considering restarting production in China sometime after Feb. 10.

Production in Hubei province of which Wuhan is the capital, will start sometime after Feb. 14.

Reuters has reported Nissan aims to sell around 1.6 million cars through its China venture this year.

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China’s services sector growth hits three-month low in January: Caixin PMI By Reuters



BEIJING (Reuters) – Growth in China’s services sector slowed for a second straight month in January, a traditionally busy sales season, hitting a three-month low as companies cut prices and new orders dipped, a private sector survey showed on Wednesday.

The Caixin/Markit services purchasing managers’ index (PMI) slowed to 51.8 last month from 52.5 in December, but was still higher than an 8-month low hit in October.

The slowdown in growth suggests the services sector, which accounts for more than half of the economy, faces persistent challenges despite a flurry of stimulus and a U.S.-China trade “Phase 1” deal. The reading is also unlikely to reflect the early impact of the coronavirus crisis that flared in late January, which could weigh heavily on growth.

“China’s economic recovery was not strong enough due to limited improvement in demand, and some companies didn’t replenish inventories,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, wrote in a note accompanying the Caixin PMI release.

The index has stayed above the 50-point margin that separates growth from contraction on a monthly basis since late 2005. Beijing has been counting on a strong services sector to cushion a prolonged slowdown in manufacturing and investment and create jobs for workers laid-off in other areas.

Economic growth has cooled to near 30-year lows amid sluggish demand at home and abroad.

The cooling trend in the private sector survey, which focuses more on small, export-oriented companies, contrasts with the official non-manufacturing PMI, which showed the sector’s activity quickened in January.

Services companies reported a smaller rise in the volume of new work in January and continued to face higher fuel and labor costs. Demand softened at home, while new orders from overseas picked up modestly from the previous month.

The pace of job creation almost stalled, with the employment sub-index hitting the lowest level in 16 months. Meanwhile, firms had to lower their selling prices for the second time, squeezing companies’ profit margins.

But their expectations regarding the one-year outlook for business activity improved notably in the month, as the “Phase 1” trade deal with the United States eased some of the pressure on exporters.

However, a coronavirus outbreak that has abruptly limited the movement of millions of people and forced the closures of restaurants, malls, and movie theaters across the country during the week-long Lunar New Year holiday, is likely to further darken the outlook for China’s slowing economy.

Analysts have noted the deepening coronavirus crisis, which is expected to be as much as two or three times worse than the SARS outbreak, will potentially add to industry headaches.

“As during the SARS episode, we expect consumption and travel to take the hardest hit,” Analysts at Oxford Economics said in a note.

“But we also expect that there will be significant disruption to other economic activities, though to a lesser degree than the impact on consumption.”

Analysts like CEBM Group’s Zhong have urged policymakers to take swift action to cushion to hit to growth from the virus.

“As the current pneumonia epidemic is putting pressure on the economy, policymakers need to make efforts to ensure no major disruptions to improving business confidence,” he said.

Caixin’s composite manufacturing and services PMI, also released on Wednesday, slowed to 51.9 in January from 52.6 in December.



Russian oil output up to 11.28 million bpd in January, highest since August By Reuters


© Reuters. A Russian state flag flies on the top of a diesel plant in the Irkutsk Oil Company-owned Yarakta Oil Field in Irkutsk Region

MOSCOW (Reuters) – Russian oil and gas condensate output rose to 11.28 million barrels per day (bpd) in January, from 11.26 million bpd in December, Interfax news agency reported on Sunday, citing Energy Ministry’s data.

This is in line with what sources told Reuters last week and the highest since it reached 11.29 million bpd in August.

In tonnes, oil output rose to 47.72 million versus 47.63 million in December. Reuters uses a 7.33 conversion ratio in its calculations when converting tonnes to barrels.

Gas condensate, a light oil, has been excluded from Russia’s production quota in a global pact aimed at curbing oil production and balancing out the energy markets.

There has been no information available on the breakdown of condensate and oil production for January in Russia.

The global deal between the Organization of the Petroleum Exporting Countries and other leading oil producers, known as OPEC+, expires after March.

Russia’s Energy Minister Alexander Novak said on Friday Russia was ready to bring forward a meeting of OPEC and its allies to February from March to address a possible hit to global oil demand from a new coronavirus outbreak in China.

OPEC oil output plunged in January to a multi-year low as top exporter Saudi Arabia and other Gulf members over-delivered on a new production-limiting accord and Libyan supply dropped due to a blockade of ports and oilfields.

Russian gas production was at 65.51 billion cubic meters (bcm) last month, down from 67.21 bcm in December, Interfax reported.

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South Korea January exports fall for 14th straight month, virus threat looms By Reuters



By Joori Roh and Cynthia Kim

SEOUL (Reuters) – South Korean exports suffered a sharper contraction in January, falling for a 14th straight month as worsening sentiment over the new coronavirus and the effect from fewer working days outweighed improving global demand for semiconductors.

Overseas sales tumbled 6.1% at the first month of 2020 from a year earlier, trade ministry data showed on Saturday, worse than a 5.2% drop in December but beating a median 7.8% decline tipped in a Reuters poll.

Average exports per working day, however, rose 4.8% on year, the first expansion in 14 months, when eliminating the calendar effect. There were only 21.5 working days in January, 2.5 days less than last year, due to changes in the Lunar New Year holiday.

South Korea’s exports are a closely watched bellwether for world trade as it is the first major exporting economy to release monthly foreign trade data.

Overseas sales of semiconductors, the country’s top export, accounting for one-fifth of its total exports, fell 3.4% year-on-year, logging the smallest decline in 14 months.

The novel coronavirus’ spread across China and the globe had cast a shadow over expectations Asia’s fourth largest economy was heading for a firmer footing. Disruptions from the virus are seen knocking economic growth in China and beyond, denting demand for Korean goods.

The trade ministry said January figures showed barely any impact from the virus, but shipments may be affected from February if risks from the virus threat lingers.

On Monday, the Chinese government has extended the week-long Lunar New Year holiday by three days to Feb. 2 as it seeks to limit the spread of the coronavirus. The holiday, which began on Jan. 24, had been due to end on Jan. 30.

“Though we see exports recovery momentum on improving export prices and chip sales, exports to China are likely to have a negative impact, depending on the extent of the virus spread and whether it lasts,” said Chun Kyu-yeon, an economist at Hana Financial Investment.

Exports to China, South Korea’s biggest trading partner, fell 10.5% year-on-year just a month after recording the first growth in 14 months in December.

The ministry said China-bound sales fell mainly due to the holiday comparisons, and that exports to China’s Hubei province, where the epidemic originated, accounts for only 0.3% of total exports, meaning the direct impact will be limited.

Imports fell 5.3% in January, better than a 6.9% contraction tipped in the survey and compared to a 4.6% fall in December. That brought the month’s trade balance to a $0.62 billion surplus, the smallest in seven years and compared to a $2.02 billion surplus a month earlier.

The trade figures came a day after data showed South Korea’s factory output surged sharply and exceeded forecasts in December, as soaring chip production fueled industrial activity.

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Euro zone sentiment jumps in January as industry fears recede By Reuters



BRUSSELS (Reuters) – Euro zone economic mood jumped in January as confidence among manufacturers rose to its highest level since August, in a sign that the bloc’s economy may have had a strong start of the year, European Commission data showed on Thursday.

In a separate release, the EU statistics office Eurostat also said unemployment in the euro zone fell in December to its lowest rate in more than a decade.

The Commission’s monthly survey showed economic sentiment in the 19 countries sharing the euro rose to 102.8 points in January from 101.3 in December, well above the average forecast of 101.8 points in a Reuters poll of economists.

The improvement was driven by higher confidence in industry, as factory managers were more upbeat on their production expectations and their stocks of finished products.

The sector was hit hard last year by global trade wars and seems to have benefited from an initial trade deal between the United States and China signed in mid-January.

Among euro zone’s largest economies, the industry indicator rose most in Germany, the bloc’s top exporter of manufactured goods and the region’s biggest economy. But the overall industry mood remained below the long-term average both in Germany and in the euro zone.

The more positive business mood could be a signal of a stronger economy in the first quarter of 2020, as the euro zone leaves behind a year of weak growth.

Fresh unemployment data supported this upbeat view, as the jobless rate dropped in the euro zone to 7.4% in December, its lowest level since May 2008, when the global financial crisis began to hit the bloc.

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