World Economic Trends

• The Commerce Department has reported the US trade deficit fell to $42 billion in April from $42.9 billion the month before.
• The Institute for Supply Management services index increased to 54.5 in May from 50.7 the month before. The gain was the largest since May 2002.
• Australia's GDP expanded .7% in the first quarter and the second quarter figures are expected to be weak.
• Higher oil prices and SARS are blamed for weak 1st quarter economic growth in many of the smaller Asian nations.
• Brazil's economy shrank in the first quarter by .1% from the previous quarter as high interest rates dampened demand. The government has raised interest rates to a high of 26.8% in February to combat high inflation.
• Germany's Ifo index of business sentiment rose to 87.6 in May from 86.6 in April.
• The ECB is expected to cut interest rates soon to combat a sagging economy and a soaring euro.
• South Korea's government reported GDP grew 3.7% in the first quarter compared to 6.8% in the fourth quarter.