Disparities abound in global economic data
Disparities in the global economy were evident on Friday with weak jobs data underscoring the long road to recovery in the United States while China and Brazil took steps to contain rapid growth.
The U.S. unemployment rate jumped to 9.8 percent in November, a troubling sign for the country's economy that is struggling to bounce back from recession. Analysts had expected the jobless rate to hold steady at 9.6 percent.
There definitely continues to be this two-track global economic scenario, said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut.
The weak jobs numbers bolstered the case that the Federal Reserve will complete the entire $600 billion in bond purchases it announced last month to spur the recovery.
A number of emerging market policymakers have complained that the Fed's easy money policy makes life more difficult for them, as investors pile into higher-yielding markets, pushing up asset prices and currencies.
Brazil raised bank reserve requirements on Friday, looking to cool a credit boom that is fueling inflation as the country's economy expands at its fastest pace in almost three decades.
Chinese policymakers announced a change in posture to help keep in check their fast-growing economy.
China decided to announce a switch to a prudent monetary policy from a moderately loose stance, a change that could pave the way for more interest rate increases and lending controls.
Not all the U.S. data made for gloomy reading, however.
A report from the Institute for Supply Management on Friday was more in line with a raft of recent U.S. data, including solid retail sales, that have raised optimism the recovery was picking up after hitting a soft patch in the summer.
The U.S. services sector grew for an 11th straight month in November and a reading of employment among service companies rose to its highest level in more than three years.
The report offers some encouragement that we are indeed seeing a bit of the economy regaining momentum despite the fact that the (broader) employment data was pretty disappointing, said Ward McCarthy, chief financial economist at Jefferies & Co in New York.
Data in the eurozone also told two stories.
The purchasing managers indexes -- taking in more than 2,000 businesses ranging from banks to hotels -- rose to 55.4 from 53.3 in October, easily above the 50 mark separating growth from contraction.
But that strengthening recovery was dominated by France and Germany as debt-laden members showed scant sign of progress. In fact, the data looked grim for two of the countries caught in the middle of the euro zone debt crisis.
In Ireland, service sector growth was sluggish. Spain, tipped by a small minority of economists as next in line to follow Ireland for an EU/IMF bailout, saw its service sector contract for the fourth month in a row in November.
The risk of a double-dip is perhaps receding based on the recent activity numbers we've been getting, said James Knightley, senior economist at ING Commercial Banking.
We'd still suggest the recovery is going to be pretty soft relative to previous instances because of fiscal austerity, and the sovereign debt story in the euro area.
Better-than-expected euro zone sales figures on Friday, which showed 0.5 percent growth month-on-month in October, were similarly powered by Germany, while the UK services PMI showed a slight slowdown in what has so far been a strong recovery.
(Additional reporting by Zhou Xin and Simon Rabinovitch in Beijing, and Lucia Mutikani in Washington, Editing by Patrick Graham)
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