Spending uptick: Shoppers in the Georgetown neighbourhood of Washington DC. US retail sales accelerated in July by the most since early 2023 in a broad advance that points to a resilient consumer, even in the face of high prices and borrowing costs. — Bloomberg
WASHINGTON: Brisk July retail sales along with fewer applications for unemployment benefits underscores a US economy with staying power as inflationary pressures gradually subside.
Across the Atlantic, the UK jobless rate fell and wage growth cooled, while eurozone productivity dropped for a sixth straight quarter and job growth slowed.
Meanwhile, foreign direct investment in China slumped on investor concerns about the economy.
Fresh readings on retail spending and unemployment benefits quelled some of the restiveness about the US economy, parts of which remain restrained by elevated interest rates.
The value of retail sales increased in July by the most since early 2023 in a broad advance and firmer sales guidance by Walmart Inc, a barometer of growth, also indicated that shoppers are becoming more selective but are still spending.
Underlying US inflation eased for a fourth month on an annual basis in July, keeping the Federal Reserve (Fed) on track to lower interest rates.
While prices fell last month for apparel, new and used cars and airfares, shelter was the most disappointing part of the report, which economists and policymakers have been widely expecting to ease and help move inflation closer to the Fed’s target.
While young college-educated women are sticking with their job search even as the number of vacancies shrinks, many of their male peers are choosing to take a break.
The share of male college graduates participating in the workforce has declined in the past year, with one in five under the age of 25 neither employed nor actively looking for work, according to the latest 12-month average in a Bloomberg News analysis of government data.
UK unemployment fell unexpectedly after companies hired at the strongest pace since November, a sign of underlying strength in the economy that complicates the Bank of England’s shift towards lower interest rates.
Firms across the eurozone slowed hiring in the second quarter amid mounting signs of economic weakness.
The euro economy has sent distress signals recently, with consumers unwilling to spend despite outsized wage increases, private sector activity grinding to a halt and confidence in its largest member – Germany – tanking.
Eurozone productivity barely improved in the second quarter and again missed the European Central Bank’s (ECB) expectations – a blow for its efforts to bring inflation back to 2%.
Foreign investors pulled a record amount of money from China last quarter, likely reflecting deep pessimism about the world’s second-largest economy.
China’s direct investment liabilities in its balance of payments dropped almost US$15bil in the April to June period, marking only the second time this figure has turned negative.
Australia’s wage growth remained elevated in the second quarter, reflecting persistent inflation pressures in the economy and supporting the Reserve Bank’s view that interest rate cuts remain some way off.
In the eight months since President Javier Milei took office, prices have soared more than 100%, consumer spending tanked and unemployment climbed as Argentines have been submitted to the most brutal austerity shock in recent history. — Bloomberg