Eurozone inflation rises to record level. Inflation in the eurozone soared to a new record high for the ninth consecutive month, as Europe’s cost of living crisis deepens. Inflation in the currency bloc hit 9.1 percent year on year in August, according to flash figures released by Eurostat, amid skyrocketing energy prices. The rate was above economists’ expectations of nine percent. Headline inflation in the eurozone hit 8.9 percent year-on year in July. The closely monitored measure of core inflation, which excludes more volatile items like food and energy prices which gave a clearer idea of underlying price pressures, rose 4.3 percent year on year, in August, up from four percent in July. Several European Central Bank officials warned that high inflation will become more entrenched as more consumers and businesses expect it to remain elevated.
US consumer confidence advances to highest level since May. US consumer confidence exceeded expectations in August reaching the highest level since May indicating that US consumers are increasing their optimism on the economy amid falling fuel prices. A report published by the Conference Board on Tuesday showed that its Consumer Confidence index increased to 103.2 in August from a lower revision of the July reading to 95.3, the first increase in four months. Economists had expected the consumer confidence index to rise to 97.4 from the 95.7 originally reported for July. "The Present Situation Index recorded a gain for the first time since March," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The Expectations Index likewise improved from July's 9-year low, but remains below a reading of 80, suggesting recession risks continue. Concerns about inflation continued their retreat but remained elevated."
German unemployment rate inches higher as Ukrainian refugees join the workforce. German unemployment rose after more refugees fleeing the war in Ukraine were added to the workforce. The number of people out of work in Europe’s largest economy increased by 28,000 in August, as expected, after rising by 45,000 in July. As a result, the jobless rate inched up to 5.5 percent in August from 5.4 percent in the prior month. Despite the economic and political uncertainties, the labour market is robust, Federal Labour Agency Chief Andrea Nahles said. “Unemployment and underemployment increased again more strongly in August than is usual for the time of year. However, this is still due to the registration of Ukrainian refugees,” Nahles added.
China manufacturing sector slips into contraction. In August, China's manufacturing activity shrank for the first time in three months as a consequence of weakening demand, while power shortages and fresh Covid-19 resurgence disrupted production, a private sector survey showed on Thursday. The latest data from Caixin showed on Thursday that its manufacturing Purchasing Manger’s Index, also known as PMI, came in at 49.5, down from 50.4 in July, and below the 50 mark that separates expansion from contraction. “Lower prices for some raw materials, notably metals and chemicals, led to the first fall in input costs since May 2020, which led firms to cut their output charges for the fourth month in a row,” Caixin said.
India's manufacturing sector records second-strongest improvement in nine months. India’s manufacturing sector had the second-strongest improvement in nine months August, supported by robust demand and moderating inflation concerns, a monthly survey said on Thursday. Although the purchasing managers’ index (PMI) dipped slightly to 56.2 in August from 56.4 in July, the optimism level of firms was at its highest level in six years, S&P Global said. Contributions to the PMI from sub-indices varied as faster increases in new orders and output compared with slower expansions in employment and stocks of purchases.