From Overseas Press

Slowdown looming but no double dip

(Agencies)
Updated: 2010-06-08 09:20

Perhaps the clearest warning signal comes from the Economic Cycle Research Institute, which publishes a weekly measure of future US economic growth. Its latest reading slipped perilously close to zero, the lowest in 43 weeks.

"I'm not a double-dip person," Nobel-winning economist Edmund Phelps told Reuters Insider. "But there's always that danger when you are growing slowly that a little downdraft will catch you and pull you down quite a bit."

The number to watch this week is Friday's US retail sales report. Economists predicted a modest 0.2 percent gain, slower than April's pace but still positive.

CHINA SLOWER, BUT STILL STRONG

As for China, gauges of its manufacturing and services activity both dipped last week, raising concerns that its powerful recovery was losing momentum.

Considering China's economy grew at a nearly 12 percent clip in the first quarter and inflation has been uncomfortably high, a little cool-down is not entirely unwelcome.

China's economic indicators for May are due this week, and are likely to show a modest pickup in inflation but a decline in industrial output and investment.

Piero Ghezzi, an economist with Barclays Capital in London, said China has clamped down on monetary conditions "to an extent that may have been underappreciated by investors" in order to keep its economy from overheating.

"We believe the risks of China facing a hard landing are extremely low," he said.