Fed’s Beige Book notes increase in economic activity but nothing near pre-pandemic levels. While US economic activity increased in almost all Federal Reserve (Fed) districts in recent weeks, the central bank's Beige Book noted that activity remained well below where it was prior to the coronavirus pandemic. The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, indicated that the recent increase in economic activity came as consumer spending picked up as many non-essential businesses were allowed to reopen. However, activity remained well below where it was prior to the pandemic. Business owners remain highly uncertain about the outlook for the economy, as it was unclear how long the crisis would last. A resurgence in coronavirus cases in many states is driving fears of a new slowdown.
ECB leaves rates and stimulus programme unchanged. In its monetary policy meeting on Thursday, European Central Bank (ECB) opted to keep its interest rates and emergency coronavirus stimulus programme unchanged, while it monitors the strength of the Eurozone economy. Last month, it expanded its Pandemic Emergency Purchase Programme by 600 billion euros, bringing the size of the stimulus program to 1.35 trillion euro to be deployed until June 2021, or until the bank believes the crisis is over. The interest rate on its main refinancing operations stands at zero percent, and the interest rates on its marginal lending facility and deposit facility remain at 0.25 percent and -0.50 percent respectively.
UK unemployment rate remains stable but data probably not showing full extent of crisis. UK unemployment remained unchanged in the three months to May, data from the Office for National Statistics (ONS) showed on Thursday. In the three months to May, the jobless rate was largely unchanged at 3.9 percent, well below economists' average forecast of 4.2 percent. On the other hand, the employment rate rose by 0.3 percentage points to 76.4 percent in the three months to May. The ONS further said that early indicators for June suggested that the number of employees on payrolls fell by around 650,000 compared to March. Average weekly hours worked per person fell to a record low of 26.6 between March and May, down by 5.5 hours on the same period a year ago. Data showed that job vacancies during April to June were at the lowest level since the Vacancy Survey began in 2001, at an estimated 333,000.
China Dodges a Recession. China’s economy saw a sharp decline in the first three months of the year during coronavirus lockdowns. But figures released on Thursday show that gross domestic product (GDP) in the world’s second largest economy returned to growth during the quarter ended June, as it surged a seasonally adjusted 11.5 percent compared to the previous quarter, the National Bureau of Statistics said. The figure is higher than economists were predicting and points towards a V-shaped recovery, that is, a sharp fall followed by a quick recovery. It also means that China would avoid going into a technical recession, defined as two consecutive quarters of negative growth. On a yearly basis, GDP advanced 3.2 percent, again topping forecasts for an increase of 2.5 percent after tumbling 6.8 percent in the three months prior.
Australia jobless rate rises to 7.4 percent In June. Australia's unemployment rate came in at a seasonally adjusted 7.4 per cent in June, despite the addition of more than 210,000 jobs. The number of unemployed people rose by 69,300 to 992,300 in June, according to the Australian Bureau of Statistics. It means the country's unemployment rate has risen from 7.1 per cent in May to 7.4 per cent - the highest since November 1998. The increase of 210,800 in employment was underpinned by a large increase in part-time employment. Overall, employment increased to 12,328,500 people. The participation rate climbed to 64.0 percent.