Glimpses of hope

The US corporate sector is counting on rapid stabilization

Orders for durable goods in the US rose to 3.4% in February, the Labor Department reported yesterday. The news was unexpected - this figure was negative from July last year to January this year, when it was -7.3%. Experts surveyed by Bloomberg expected demand for durable goods to rise to -2.5% in February. Thus, the indicator turned out to be significantly better than market expectations. The corporate sector played a major role in the growth in demand, notes Alexander Apokin, an expert at the Center for Macroeconomic Analysis and Short-Term Forecasting (CMACF). He points out that company equipment costs amounted to 6.6% in February, after the January “drawdown” (-11.3%). “After some stabilization in the credit markets and a wave of layoffs in the corporate sector, companies have completed revisions of budgets for the modernization of fixed assets, access to credit has appeared and expectations have improved somewhat,” he says. “Against this background, they have significantly increased the cost of purchasing equipment.” It should be noted that government orders also added to the positive dynamics of Durable goods in February - spending on investment goods related to the defense industry increased by 35.3%.

However, it is too early to talk about the beginning of economic recovery. “The Durable goods indicator may be revised; in addition, it is very volatile,” notes Aton Investment Company analyst Inga Foksha. Market participants note that household spending on durable goods (also included in the calculation of Durable goods) is still falling. “And two-thirds of the country’s economic growth consists of the volume of population consumption,” says Mr. Apokin.

Despite the ambiguity of macroeconomic statistics, US leadership is optimistic. On Tuesday, President Barack Obama said he sees signs of progress toward the country's recovery from the economic crisis: “We are moving in the right direction.” And yesterday Obama's statement was published. "My message is clear: the United States is ready to lead, and we call on our partners to join us," he said ahead of the G20 summit in London in April.

The US President outlined three main goals to achieve stabilization of the global financial system. First, there is a general effort to stimulate economic growth. Secondly, the restoration of consumer lending and business lending. Third, fulfilling the economic and moral obligations to help countries and people who risk suffering the most. “If we turn our backs on them, the damage from the crisis will increase, and our own recovery will take longer because demand in the markets of these countries will decrease,” Obama told the G20 countries. “This means that American layoffs will continue.” In his opinion, the G20 should quickly provide resources to emerging markets, increase the volume of funds managed by the IMF and help development banks restore lending. “Our financial institutions need strong oversight, we need to get rid of offshore havens and money laundering,” Obama said. “And the days of uncontrolled compensation (to the top management of companies being rehabilitated) must end.”

Georgy VORONKOV