Brazil's FIPE inflation slows to 0.27 pct in July

Aug 3, 2007 - Consumer prices in Brazil's largest city, Sao Paulo, rose 0.27 percent in July, slowing from June's 0.55 percent rise, as food prices rose less and housing costs dipped, the Fipe research institute said on Friday.

The rise was slightly lower than the median forecast of 0.32 percent in a Reuters survey of economists.

Clothing prices fell 0.62 percent and transport costs extended their drop to 0.38 percent after 0.16 percent the previous month. Food prices rose the most, by 1.06 percent, but much less than in June, when the rise was of 1.9 percent, due to a seasonal decline in output of certain crops.

The Fipe index is closely watched by economists for trends in Brazil's benchmark IPCA inflation index, which is used by the central bank to set interest rates.

June factory orders up, but pace disappoints

Aug 2, 2007 - New orders at U.S. factories rose less than expected in June while jobless claims edged higher last week, government data released on Thursday showed, but neither report gained traction in wary financial markets.

Factory orders increased 0.6 percent in June and fell somewhat once the volatile transportation component was excluded. Analysts polled by Reuters expected orders to climb 1.0 percent in June from an unrevised 0.5 percent fall in May.

Economists said the data indicated the sector remains in good shape -- important because manufacturing has helped to offset weakness in the U.S. housing market. However, the report gained little attention from investors who remained focused on problems in credit and subprime mortgage markets.

"I don't think factory orders is what people see as driving the market. The story is about credit markets and the related markets," said Bill Hornbarger, chief fixed-income strategist at A.G. Edwards & Sons in St. Louis.

June nondefense capital goods orders excluding aircraft, viewed as a good proxy for business spending, were unchanged, which was slightly better than a 0.7 percent decline seen in an earlier estimate by the government last week.

"The best thing about the report is that the core reading, nondefense capital orders, was revised higher. This suggests a slightly upward revision, about a tenth of percentage point, to second-quarter GDP," said Michelle Meyer, an economist with Lehman Brothers in New York.

The U.S. economy grew at a 3.4 percent annualized pace in April to June, according to an initial government estimate, up from a 0.6 percent rate in the first quarter.

Excluding transportation, factory orders declined 0.5 percent, the first outright fall since January when they shrank 2.5 percent. The category's June performance was hurt by a 3.6 percent drop in orders for computers and electronic products and a 6.1 percent fall in primary metals.

STRONG JOBS

The other main economic release on Thursday was from the U.S. Labor Department, whose data showed new applications for jobless benefits rose a slim 4,000 last week to a still-low 307,000. That signaled a healthy jobs market ahead of the monthly employment report due on Friday.

"Initial claims remain low, continuing to suggest low levels of job loss; continuing claims edge down but remain relatively high by standards of latest few months," Goldman Sachs' economists said in a note to clients.

Wall Street economists polled by Reuters ahead of the report were expecting a reading of 310,000 after an originally reported 301,000 in the prior week. The department revised up the prior week's figure to 303,000.

Continuing claims for people who already qualify for benefits and remain on the jobless rolls fell by 16,000 to 2.53 million for the week ended July 21, the most recent period these figures were available.

Swedish Q2 GDP up 1.0 pct from Q1; up 3.6 pct year-on-year

Aug 2, 2007 - Sweden's calendar-adjusted GDP rose by 3.6 pct during the second quarter compared to a year earlier, Statistics Sweden (SCB) reported.

Compared to the first quarter of 2006, the seasonally adjusted GDP grew by 1.0 pct.

Market expectations were for a quarterly rise of 0.7 pct and an annual increase of 3.2 pct, according to SME Direkt.

Household consumption and gross fixed capital formation made the highest contributions to GDP growth, SCB said.

Gross fixed capital formation was up 9.2 pct year-on year, while household consumption expenditures increased 2.5 pct.

Exports increased 5.9 pct and imports rose 7.8 pct, while general government expenditures increased 1.9 pct.

Total employment, measured as the number of hours worked, was up 4.0 pct on year.