19 June 2020
US retail sales surge a record 17.7 percent in May. US shoppers opened their wallets at malls and auto dealerships in May as states eased restrictions to contain the coronavirus, underpinning retail spending and adding another sign that the economy is recovering from earlier lockdowns to control the pandemic. Figures released by the Commerce Department showed that retail sales, a measure of purchases at shops, restaurants and online, increased a seasonally adjusted 17.7 percent in May from a month earlier, blowing away already-lofty expectations. The gain in sales easily topped the record of 6.7 percent from October 2001 - a month after the September 11 terrorist attacks - and beat the eight percent gain forecast by economists.
Powell warns Congress against withdrawing stimulus Federal Reserve Chairman Jerome Powell on Tuesday warned about “significant uncertainty” regarding the pace of the US economic recovery and said that small businesses, lower-income Americans and minorities are particularly at risk. The central bank leader made these remarks during the first day of his semi-annual testimony before Congress and echoed the tone he expressed a week earlier after the Federal Open Market Committee meeting. Mr Powell also warned lawmakers against withdrawing fiscal support for the US economy, saying it could put the recovery at risk of another shock from the coronavirus crisis. The US entered a recession in February, a month before the World Health Organization declared the coronavirus a pandemic, according to the National Bureau of Economic Research.
UK inflation at four-year low. UK inflation eased to a four-year low in May, adding pressure on the Bank of England to further ease monetary policy. The inflation rate, as measured by the Consumer Price Index, or CPI, eased to 0.5 percent in May from 0.8 percent in April, moving further below from the central bank’s two percent target. Cheaper petrol and the falling cost of toys and games exerted a downward pressure on the cost of living, more than compensating for higher food and drink prices. Weaker domestic prices as a result of the restrictions placed on the economy since the end of March have also helped to dampen inflation, which has fallen for four months in a row.
Fitch lowers India credit rating outlook to negative on coronavirus impact. Fitch Ratings lowered India's sovereign rating outlook to 'negative' from 'stable', citing the severe impact of the coronavirus pandemic on the country's growth and public finances outlook. However, the rating agency affirmed the country's rating at 'BBB-'. Fitch forecast a five percent contraction for the Indian economy for this fiscal year ending March 2021, due to the strict lockdown measures imposed since March 25. The economy is expected to rebound by 9.5 percent in the next fiscal year. "The coronavirus pandemic has significantly weakened India's growth outlook for this year and exposed the challenges associated with a high public-debt burden," Fitch said.
Australia jobless rate climbs to 7.1 percent In May. The Australian economy shed another 227,000 jobs in May, with the unemployment rate reaching 7.1 per cent, its highest level since 2001. The Australian Bureau of Statistics revealed on Thursday that the country has now lost more than 824,000 jobs over the past two months, taking employment down to where it stood in March of 2017. Unemployment rose from an upwardly revised 6.4 percent in April. The overall result would have been much worse but for another fall in the participation rate, which edged down to 62.9 percent, its lowest level since 1998.