February Japanese industrial production fell 2.3% on the month against expectations of a 0.3% rise.
An ominous sign for Abenomics ahead of the sales-tax hike set to take effect Tuesday. Of course the fall in February’s industrial production numbers could be read as a payback for January’s surprisingly strong 3.8% rise. And weather also played a role. But the February number was still a big miss and a worrisome sign as the sales-tax hike, to 8% from 5%, is expected to have a chilling effect on domestic demand and could snuff out the economy’s fragile recovery. Still, some analysts noted that industrial production is more closely tied to exports, not domestic demand, and that a revival will require a stronger pickup in demand from the U.S.
GERMANY: February retail sales rose 1.3% on the month against expectations of a 0.5% fall. Sales were up 2.0% on the year from a 0.9% rise in January.
German retail sales bucked expectations of a modest February reversal of January’s relatively robust numbers by posting a second month of strong growth. The figures portend a good first quarter GDP print, though March data could well be dented by concerns about the Crimean crisis.
FRANCE: 4Q GDP grew 0.3% on the previous quarter, unrevised from the earlier estimate, and grew 0.3% on the year.
Surprisingly enough, the French economy almost grew as much as Germany’s during 2013, paltry as that pace was. Signs of stability will be welcomed, though tax rises have dented consumption. (AM)
U.K.: February mortgage approvals were at 70,309 against expectations of 75,500; February net consumer lending rose GBP2.3 billion against GBP2.2 billion expected.
Britons are borrowing, not least to buy houses, albeit at nowhere near the pace from before the financial crisis. But the trend has generally been upward notwithstanding a dip in mortgage approvals during February, the first monthly decline in a year–January’s rate was an unusually strong surge, representing a six-year high.
