Services growth slows, but silver lining jobs

Workers are visible in an Office in Jersey City, New Jersey on December 9, 2009.

Credit: Reuters/Lucas JacksonBy Leah Schnurr

NEW YORK | Wed July 6, 2011 12: 00 pm EDT

NEW YORK (Reuters) - growth in services broad sector of the economy of the United States remained sluggish in June as new orders fell, but economists said that a reading of a stable job told the employment growth later in the year.

Image of the Wednesday of the conditions of the labour market at the Institute for supply management services sector data comes from two days in advance of the U.S. key jobs report which is supposed to show non-farm payroll rose modestly last month after the collapse in May.

Analysts are watching closely the signs that the economy is gaining traction after growth has slowed in the first six months of 2011, and many are accelerating at the end of the year.

John Silvia, Wells Fargo Chief Economist, said that, if data services was lower than expected, it was always compatible with sustained economic growth in the second half of the year.

Silvia "positive is that the employment index remains in the territory of expansion", wrote in a note. "This reading suggests growth prospects of ongoing payroll in the coming months."

The index of the ISM Report services fell to 53.3 month last of 54.6 in May. The reading was shy of forecasts of economists to 54.0, according to Reuters. A reading above 50 indicates expansion in the sector.

The dip comes after a modest gain in may, and the index is still off the coast of the Advanced view earlier this year.

The new component command while relaxed to 53.6 56.8, as the gauge of employment improved slightly, edging up to 54.0 54.1.

Employment growth is essential to strengthen the confidence of consumers, and even if the tonnage of the job held until this month, it must be higher, said Anthony Nieves, President of the Commission of inquiry ISM non-manufacturing business.

"People are always work." Companies add some posts, but on the whole, people are still trying to find their way, "Nieves told a conference call."

Despite the lack of light on the front of the employment, Chris Low, an economist at FTN financial, said the index has not yet signal of the economy has overcome recent weakness.

"The small decline in June a reminder that while the economy may stabilize at a slower pace of growth, there is little evidence of reacceleration," said low.

Treasury prices rose after the data, and there were few moving in US stocks as investors focused on the concerns renewed during the crisis of sovereign debt of the euro area and China's interest rate increase.

The ISM report echoed data from Europe Tuesday that growth services has slowed the month last faced with the stagnation of new orders and rising interest rates.

Key to Friday report of non-farm payroll U.S. forecast to show the economy 90,000 jobs in June, compared to just 54 000 the previous month. For an overview, see

A report on the employment of private sector U.S. Thursday should also show a gain of 68 000 jobs.

A separate report on Wednesday gave a more cloudy labour market image as the number of layoffs planned at American companies have increased for the second month in a row in June, if the reduction in the first half of the year were at the lowest level since 2000.

Data the latest on the housing market was mixed as buy applications for home mortgages of the pink U.S. last week, but refinancing activity plunged as interest rates jumped, according to the Mortgage Bankers Association.

(Other reports by Ellen Freilich;) (Editing by Padraic Cassidy)

COME Shirakawa, said world growth slows but intact recovery

By Leika Kihara

TOKYO. Sun, July 3, 2011 9 pm EDT

TOKYO (Reuters) - the Japan Bank Governor Masaaki Shirakawa said that slightly more cautious on global growth as signs of slowdown in the global economy continues to recover albeit at a slower pace, a point of view to spread to emerging economies.

But he upheld the assessment of the Central Bank, while the Japanese economy remains under pressure downward, mainly on the production, he shows signs of pick up.

"The Japanese economy resumed probably a moderate recovery as more ease constraints supply and output activity picks up," Shirakawa said in a speech at a quarterly meeting of managers of the branch of the Bank of the Japan Monday.

The Bank of Japan is growing more and more convinced that will go the Japanese economy back after the devastation of the 11 March earthquake and the tsunami at the end of this year that the restoration of the supply chain companies more quickly than expected.

Dans in factory output jumped by most dans almost 60 years, while the latest Central Bank's quarterly tankan survey showed that companies expect an improvement in the sense of business in the coming months and plan to increase capital expenditures.

The Bank of the Japan should maintain distance on political relaxation more in his review of rates, the next week and tone up its optimism on the output and the economy, even if it strikes a note of caution about signs of an economic slowdown.

Some members of the Bank of the Japan became more more worry softening of world growth which, if prolonged, will hurt exports just at the moment where Japan undermines the constraints of supply in the fall.

Acknowledgement of Shirakawa of the slowdown follows a warning by the BOJ Yoshihisa Morimoto Commission Member last month that the global economic risks have heightened somewhat after a sweep of weak US data.

But many of the Central Bank did not expect even the global slowdown turn into a recession which would adversely affect export quite seriously threaten the recovery of the Japan.

"Output and private domestic demand showed signs of picking up, as supply constraints begin to ease and household and business sentiment improved somewhat" Shirakawa said in the speech Monday.

The Bank of the Japan should cut its economic forecasts for the current fiscal year which began in April when it conducts a quarterly review of its long-term projections in the rate review next week, sources familiar with the thinking of the Bank said.

But this would be a technical revision reflecting the sharp contraction in the January-March GDP and revisions in the figures of last year and would not affect monetary policy and the opinion of the Bank of Japan that growth will resume towards the end of this year, they said.

(Editing by Edmund Klamann)

China December automatically sales up but growth slows (AP)

BEIJING - auto sales pink China by two digits in December as buyers rushed to take advantage of the expiration of the tax breaks but growth weakened after a wave focused on stimulation at beginning of the year, two industry groups reported Monday.

Global carmakers are turning to China, the largest market by number of vehicles sold, to help drive revenue in the middle of the low demand in the U.S. and other major markets.

Total passenger car sales rose 17.9% in December, more than a year earlier to 1.7 million units, China Automotive Manufacturers Association reported. He said fiscal year sales rose 33.2% to 13.7 million vehicles.

"Customers want to catch tax reduction policy and the last possible opportunity to obtain licences from the car in many cities of the North," said Zhang Xin in Guotai & Jun Automotive Analyst ' year Securities in Beijing. "I believe that growth will be barely last in 2011, unless y new out stimulus policy."

Sales of passenger cars, a category that includes no large buses, pink 26.7% in December from a year earlier to little less than 1.5 million units, said a separate group, the Association of China passenger car. He said, sales increased by 30.5% to 13.3 million vehicles.

Sale of cars have skyrocketed in early 2010 after Beijing Cup sales taxes and grants buyers to smaller vehicles and energy efficient.

China passed the United States in 2009 as the largest market by number of vehicles that the global financial crisis battered sales Americans.

General Motors Co. said sales of 2009 China GM-brand vehicles by the company and its local partners rose 29 percent to 2.35 million units. China passed the United States as the GM at the beginning of last year's market.

Toyota Motor Corp., said sales by the company and its local partners increased by 19% year last 846,000 vehicles. Ford Motor Co. said sales in China jumped last 40 per cent to 582,467 units, aided by a 52% increase in December.

The explosive growth of Chinese car owner has helped propel a domestic automotive and steel demand rising, but left Beijing, Shanghai and other cities jammed with traffic and choking smog.

Some cities are considering plans to address traffic problems by raising the costs of registration plate or impose other borders, according to industry analysts.

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Online:

China Association of automobile manufacturers: http://www.caam.org.cn

Blog by Director of the China passenger car Association: http://raodaauto.blog.sohu.com

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Researcher AP Ji Chen in Shanghai has contributed to this report.