ECB announces more stimulus. The European Central Bank (ECB) announced on Thursday that it will increase its Pandemic Emergency Purchase Programme (PEPP) by 600 billion euro, as the eurozone faces its worst recession in decades due to the impact of the coronavirus pandemic. The latest package is in addition to the 750 billion euro of government bond purchases that the ECB announced in March, taking the total to 1.35 trillion euro. The central bank also said that the duration of its crisis bond-buying programme would be extended from the end of 2020 until June 2021, or until the bank believes the crisis is over. This expansion will further ease the general monetary policy stance and support funding conditions in the real economy, especially for businesses and households, the ECB said.
Eurozone unemployment rises marginally in April. According to figures released by Eurostat on Wednesday, the eurozone unemployment rate increased only marginally to 7.3 percent in April while the March figure was revised down to 7.1 percent. This surprisingly small increase since the start of the coronavirus crisis can be attributed to the government job subsidy schemes and the fact that a significant number of the newly unemployed has not been picked up by the statistics as people need to be looking for work to be counted as unemployed. The jobless figure came well below economists' forecast of 8.2 percent. The number of unemployed increased by 211,000 from March to 11.92 million in April.
US weekly jobless claims drop to 1.877 million. First-time claims for US unemployment benefits pulled back further off their recent multi-decade high in the week ended 30 May, according to the weekly report released by the Labour Department. Filings for unemployment insurance claims totalled 1.877 million last week in a sign that the worst is over for the coronavirus-related jobs crisis but also that the level of unemployment remains stubbornly high. Economists had expected jobless claims to slump to 1.80 million from the 2.123 million originally reported for the previous week. While claims declined for the ninth straight week, Paul Ashworth, Chief U.S. Economist at Capital Economics, noted that "The pace of decline has begun to stall a little, with claims still at an otherwise unprecedented level."
China's services sector bounces back into growth, job losses continue. China’s services sector emerged from a three-month streak of negative growth to register strong growth in May, while the rest of the world saw further declines in activity even as lockdowns began to ease. The Caixin/Markit services Purchasing Managers’ Index, or PMI, rose to 55.0 in April from 44.4 in April, hitting the highest level since late 2010. The 50-mark separates growth from contraction on a monthly basis. China was the first major economy to begin reopening after the coronavirus outbreak. The services sector is an important generator of jobs which accounts for about 60 percent of the Chinese economy. But even as service providers reported a pickup in output, they continued to cut jobs.
Australia's government unveiled a stimulus package to support housing market activity and to generate more jobs in the construction sector as the economy is set to enter its first recession in 29 years. The new HomeBuilder programme will provide owner-occupiers with a grant of A$25,000 to build a new home or substantially renovate an existing oen, Prime Minister Scott Morrison said. The programme is expected to provide around 27,000 grants at a total cost of around A$680 million. This increase in residential construction will help to fill the gap in construction activity expected in the second half of 2020 due to the coronavirus pandemic, Morrison said.