June 12, 2009 / 3:49 AM / 10 years ago

TOPWRAP 6-U.S., European data cloud global recovery picture

* U.S. consumer confidence survey mixed

* Record fall in April euro zone industrial output

* China May factory output up 8.9 percent, retail sales up

* Japan April industrial output revised up

(For more on the global crisis, click [nCRISIS])

By Al Yoon

NEW YORK, June 12 (Reuters) - U.S. consumer confidence this month fell short of expectations and a record drop in euro zone industrial production dampened signs from Asia of a nascent global economic recovery.

The Reuters/University of Michigan preliminary June U.S. consumer sentiment index rose to 69 from 68.7 in May, but fell short of economists’ estimate of 69.5. A separate index of consumers’ expectations declined, further clouding the U.S. outlook. [nN12549197]

In the 16-nation euro zone, production fell by a worse-than-expected 21.6 percent in April compared with a year earlier, mainly on plunging output of intermediate and capital goods, a sign that investment continued to decline in the bloc. [nLC172970]

While the United States and Europe struggled, the Asian economic outlook strengthened, with Chinese output rebounding more than expected in May and Japan posting its biggest monthly jump in production in half a century.

A growing conviction that the global economy is starting to claw its way out of the deepest recession in six decades has boosted stock markets from March lows. But a sharp spike in government and consumer credit costs, along with spotty signs of stronger global growth, has since tempered optimism among investors.

“While this is recovery, and it’s better, it may not be the jumping-on point to a stronger” rebound in growth, said Bill Schultz, chief investment officer at McQueen Ball & Associates in Bethlehem, Pennsylvania.

Global financial markets reflected the mixed picture from economic reports, with U.S. stock markets rising slightly and European indices snapping three days of gains. U.S. government borrowing costs fell from the eight-month highs hit on expectations that the recession was easing.

Germany will press G8 finance ministers to start working on how to return policy to normal after months of crisis at a meeting in Italy on Friday, although hopes the world economy has turned the corner are still fragile. [nLC727487]

The International Monetary Fund increased its forecast for global growth next year to 2.4 percent from 1.9 percent, a G8 source said, offering more hope for a global economic recovery.

RECOVERY ‘NOT FULLY UNDERWAY’

Europe’s top carmaker Volkswagen (VOWG.DE) said it saw no signs of a recovery in global markets outside China.

A confidential European Commission report obtained by Reuters injected a further note of pessimism, saying a significant global recovery had yet to get going. [nLC803149]

“Despite some evidence of a slowdown in the pace of decline, the evolution of imports and exports of all major countries remains very negative,” the report said. “Moreover, the fact that unemployment continues to rise in most major economies, means the global recovery is still not fully underway.”

The Dow Jones Industrial Average closed up 0.3 percent to 8,799.26 .DJI. European shares initially rose on the Chinese data but the pan-European FTSEurofirst 300 .FTEU3 finished the day down 0.2 percent at 885.75 points.

Chinese figures, which also showed a jump in retail sales, suggested tax breaks and huge government stimulus spending were helping to offset weak exports. And the record pace of rising capacity utilization in Japan, if sustained, could encourage firms to spend more on equipment.

Tokyo's Nikkei .N225 rose 1.6 percent to close above 10,000 for the first time in 8 months and MSCI's index of shares elsewhere in Asia .MIAPJ0000PUS fell 0.4 percent, although market players said momentum was slowing. [.T]

“The ‘green shoots’ rally has really about reached its limits, and we’ll need some signs of improving company earnings such as upward forecast revisions, perhaps in a month or so, to really make more gains,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Japan.

China’s National Bureau of Statistics said annual industrial output growth rebounded to 8.9 percent in May from 7.3 percent in April, above a median forecast of 7.5 percent. [nPEK330475]

Annual growth in retail sales in China rose to 15.2 percent in May from 14.8 percent in April, slightly ahead of forecasts, partly due to a moderate pace of deflation.

Japan’s industrial output rose 5.9 percent in April, revised up from a preliminary reading of 5.2 percent and marking the biggest monthly gain since 1953. [nTFD006266]

Separate surveys also showed consumer confidence in Japan picked up in May, while a capacity utilization index rose 10.2 percent in April, posting its biggest monthly gain on record and its second successive increase since hitting a record low in February. [nTKG006358] [nT330958]

But Japan’s export-driven economy remains hard-hit, forcing top firms such as Toyota Motor (7203.T) and Sony Corp (6758.T)to slash production and lay off workers.

European Central Bank Governing Council member Christian Noyer told a Beijing banking conference he saw reason for cautious optimism about the euro zone’s prospects, saying a decline in inflation could boost euro zone disposable income by as much as 3.5 percentage points by mid-2009. [nBJB000625]

In Britain, Bank of England Monetary Policy Committee member Paul Fisher said policymakers should not be complacent, despite signs Britain’s economy may be starting to recover.

“There are likely to be bumps in the road ahead, with many twists and turns,” Fisher said in a speech to business leaders in central England. [nLAC003316]

Reporting by Reuters bureaux worldwide; writing by Al Yoon; Editing by Eric Beech

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