Fed report shows US economy moving on multiple tracks. The US economy grew modestly over the summer period, according to the Federal Reserve’s Beige Book that was published on Wednesday. The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Federal Reserve districts, also noted economic activity remains well below levels prior to the Covid-19 pandemic. The report painted a picture of an economy moving on multiple tracks. Some industries, such as residential construction and real estate, auto sales and manufacturing, saw pent-up customer demand return as pandemic-related lockdowns eased. However many parts of the country experienced slower growth amid lingering anxiety over the pandemic, according to the report.
Eurozone producer prices fall at slowest pace in July. Eurozone producer prices continued to fall in July but the rate of annual decline slowed further, data from Eurostat showed on Wednesday. Producer prices fell by 3.3 percent in July compared to July of last year, following a 3.7 percent decrease in June. The annual fall was largely driven by an 11.6 percent decrease in energy prices. Excluding energy, producer prices were down by 0.4 percent on an annual basis compared to a 0.5 percent drop in the prior month. Prices of durable consumer goods advanced 1.6 percent and those of non-durable consumer goods moved up by 0.4 percent, partially offsetting the decline in the overall price decline. Prices of capital goods also gained 0.9 percent. Month-on-month, producer prices climbed 0.6 percent in July compared to a 0.7 percent rise in June.
German retail sales unexpectedly fall In July Germany's retail sales fell for a second month in a row in July, defying expectations for a rebound after the pandemic-related lockdown restrictions were eased, preliminary data from the Federal Statistical Office showed on Wednesday. Retail sales were down by 0.9 percent in July versus the previous month in real terms after a revised drop of 1.9 percent in June, calendar adjusted data showed. These latest figures shatter hopes that household spending in Europe’s largest economy will power a strong recovery in the third quarter after the coronavirus shock. Compared to February 2020, the month before the outbreak of Covid-19 in Germany, the turnover in July 2020 was 0.9 percent higher, the office said, suggesting that this sector of the economy managed to recover fairly quickly.
UK house prices at all-time high in August, says Nationwide. UK house prices continued their post-lockdown recovery in August, notching up their highest monthly rise in more than 16 years, according to mortgage lender Nationwide. Prices rose by two percent last month, it said, taking the average price to £224,123. However, the number of sales is still comparatively low, making prices more volatile. Nationwide also said that the recovery in housing market activity had been "unexpectedly rapid". This could indicate that buyers are beginning to shake off ongoing uncertainty about the economy and will also have been helped by the continued easing of lockdown measures. However, forecasters expect a drop in prices again when the economic impact of the virus is felt on jobs.
China's services sector sustains recovery. The services sector in China continued to grow in August, albeit at a slightly slower pace, the latest survey from Caixin showed this week, with a services Purchasing Managers’ Index, or PMI, score coming in at 54.0. That is marginally down from 54.1 in July, although it remains well above the 50 level that separates expansion from contraction. The services sector, which accounts for about 60 percent of the Chinese economy and half of urban jobs, had been slower to return to growth initially than large manufacturers, but the recovery has gathered pace in recent months as Covid-19 restrictions on public gatherings have been lifted.