Economics Overview

This week, The Economist published an overview of the previous weeks economic headlines. Here are the overviews:

Economic and financial indicators
The American housing market cooled further, as existing home sales dropped by 4.1% in July, to the lowest level in 2½ years. The National Association of Realtors reported that the median house price was 0.9% higher than in July last year, marking the smallest year-on-year increase since May 1995. Inventories of homes reached 3.9m, a record, which would take over seven months to clear at July's pace of sales.

A weak housing market is dampening the spirits of America's consumers. Sentiment eroded faster than expected, according to the University of Michigan's August index of consumer confidence, which fell to 78.7 from 84.7 in July.

Confidence also dipped in Germany, where the ZEW economic-sentiment indicator, based on a survey of analysts and institutional investors, fell to –5.6, far below its historical average of 35. The Ifo index of business sentiment fell, too, but by less than expected, to 105.0 from 105.6.

Imports to the euro area have increased by 13% in the year to June, a sign of healthy consumption; exports have risen by 8%. Nonetheless, the euro area's merchandise trade balance swung from deficit in May to a surplus of €2.0 billion ($2.5 billion) in June. Meanwhile, new industrial orders in the euro area declined by 2.5% in the same period.

Emerging-Market Indicators
South Africa's GDP grew at an annual pace of 4.9% in the second quarter, or by 3.6% compared with the same quarter a year ago. This was faster than expected—and faster than the central bank, which fears inflation, might have hoped.

Taiwan's economy grew by 4.6% in the year to the second quarter. Chile's GDP grew by 4.5% over the same period.